Boeing (BA) - Get Boeing Company Report shares powered higher Thursday after authorities in China cleared the path for a return to service of the troubled 737 MAX in the world's biggest aircraft market.
China's Civil Aviation Authority (CAAC) issued an "airworthiness directive" Thursday that provides instructions to airline operators as to what changes are required from the 737 MAX before the planes can be included in fleet operations.
The CAAC, which grounded the MAX in 2019 following the deadly crashes in Indonesia and Ethiopia, invited domestic carriers to comment on changes to the aircraft's aviation control system software and display last month after concluding it was satisfied with Boeing's modification efforts.
"The CAAC's decision is an important milestone toward safely returning the 737 MAX to service in China," Boeing said in a statement. "Boeing continues to work with regulators and our customers to return the airplane to service worldwide."
Boeing shares were marked 3.7% higher in early trading Thursday to change hands at $195. each.
Earlier this fall, oeing said China, the world's second-largest economy but the largest aircraft market, would likely need 8,700 new airplanes over the next two decades, a figure that translates to overall sales of around $1.47 trillion.
A further $1.8 trillion will likely be needed to service both its existing and future fleet additions over the next 20 years, Boeing said.
Boeing's 2021 Market Outlook, its annual analysis of long-term market dynamics, sees overall demand for around 43,610 over the next two decades, a figure that represents around $7.2 trillion in value but is down from its 2019 forecast of 44,040.
Boeing's ten year forecast sees global demand for 19,000 commercial airplanes valued at around $3.2 trillion, the company said, as cargo fleets expand to meet expanding e-commerce sales in major economies around the world.