Shares of Boeing rose Thursday after plane maker Dow Jones struck a deal with El Al Israel Airline worth up to $2.5 billion. Elsewhere, the US approved another $20 billion in arms sales to Israel.
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Boeing stock is gearing up for a bumpy ride as crisis of confidence plagues the planemaker
Boeing (BA) announced Thursday morning that it has reached an agreement with El Al for up to 31 of its 737 MAX jets. According to reports, the new MAX aircraft would replace El Al’s current Boeing fleet of 737-800 and 737-900 aircraft.
El Al agreed to buy 20 737 MAXs for $1.5 billion, with the option for 11 additional aircraft. Deliveries could begin as early as 2027, Barron’s reported.
The deal comes after El Al purchased three additional 787-9 aircraft earlier this year with the option for another six as the airline expands its 787 Dreamliner fleet. Boeing will deliver one new 787-9 this year and lease two more to El Al in the coming years.
Boeing has faced quality control issues this year following in-flight disruptions caused by the Alaska Airlines (ALK) emergency landing in January. The Dow Jones giant named Robert Kelly Ortberg as its new president and CEO on August 8. Ortberg replaced Dave Calhoun, who announced plans to retire in March.
Elsewhere, President Biden’s administration approved an additional $20 billion in arms sales to Israel on Tuesday, following concerns about a broader escalation in the Middle East. The sale includes more than 50 F-15 fighter jets. Boeing is the prime contractor for the F-15s. The sale also includes Advanced Medium Range Air-to-Air Missiles (AMRAAMs) and 120mm tank ammunition, as well as high explosive mortars and tactical vehicles, the AP reported. The first deliveries are not expected to begin until 2026.
Boeing shares rise on the news
Shares of Boeing rose 4.7% on Thursday after the El Al news, recovering above the 21-day mark.
Shares have traded around April lows since August’s star. Shares of Boeing are down 32% this year due to the mechanical problems.
You can follow Harrison Miller for more stock market news and updates on X/Twitter @IBD_Harrison
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