The European Union Aviation Safety Agency (EASA), which represents 27 EU member states, issued a draft statement that followed months of safety and performance checks on the workhorse aircraft, which suffered two fatal crashes in 2018 and 2019 that killed 346 people. The EU move, which includes a 28-day period for public comment, comes less than a week after a similar decision from the U.S. Federal Aviation Administration, which clear the MAX for a return to commercial service on December 29.
The stock was also boosted by comments from Ryanair (RYAAY) - Get Report CEO Michael O'Leary, who told Reuters that his budget carrier could buy additional 737 MAX aircraft as part of ongoing talks that are expected to conclude early next year.
Boeing shares were marked 5.3% higher in ear;y trading Tuesday to change hands at $222.58 each, extending their six-month gain to around 95%.
FAA Administrator Steven Dickson said on November 18 that he was "100% confident" in the safety of the aircraft after rescinding a 20-month old order that allows the plane to resume commercial flights. The FAA's airworthiness directive requires "installing new flight control computer (FCC) software, revising the existing Airplane Flight Manual (AFM) to incorporate new and revised flightcrew procedures, installing new MAX display system", and draws a line under what has undoubtedly been the worst chapter in Boeing's 104 year history.
Boeing told investors in late October that it has around 3,400 737 aircraft in backlog -- as well as 450 already built and stored in inventory -- and doesn't expect to increase production rates beyond 31 new planes in 2022 as it continues to assess demand in the wake of travel restrictions triggered by the coronavirus pandemic.
The unprecedented spread, however, has hit Boeing hard, prompting the planemaker to increase its target for staff reductions last month hat will take its overall headcount to under 130,000 by the end of next year.
Boeing posted a loss of $754 million for the three months ending in September, as revenues fell nearly 30% to $14.1 billion. Commercial airplane revenues fell 56.4% to $3.6 billion, Boeing said, while defense, space and security revenues slumped to $6.8 billion.