(Reuters) – Boeing shares rose on Monday after a report said China was considering ending its freeze on purchases of the plane maker’s best-selling 737 MAX jet after more than four years.
This, coupled with orders for striker jets from Middle Eastern airlines at the Dubai Airshow, sent Boeing shares up 4%. Supplier Spirit Aerosystems also rose 2.7%.
China is considering resuming purchases of Boeing’s 737 MAX aircraft when the presidents of the United States and China meet this week at the APEC summit, Bloomberg News reported on Sunday, citing people familiar with the matter.
The resumption of 737 orders from China would be significant for Boeing’s results over the next six to 18 months, said Thomas Hayes, president of hedge fund Great Hill Capital.
Deliveries of Boeing’s best-selling 737 MAX to Chinese airlines have been halted after two deadly crashes.
Boeing also secured orders for 125 wide-body jets worth more than $50 billion from Emirates and its sister airline flydubai at the opening of the Dubai Airshow on Monday.
Demand for the industry’s largest planes that have dominated the region’s airports is rising after a prolonged cyclical slowdown followed by the damaging effect of COVID-19 on long-haul travel.
Airlines have been urgently placing orders as order delays from aircraft manufacturers have increased and aircraft deliveries have been delayed towards the end of the decade.
“The potential reopening of the 737 in China for Boeing and contracts at the Dubai Airshow is the perfect combination of optimism and positive outlook that the stock has been needing for many months of underperformance,” Hayes added.
Boeing shares were trading at $205.15, compared to analysts’ current average price target of $250, according to LSEG data.
(Reporting by Shivansh Tiwary and Ananya Mariam Rajesh in Bengaluru; Editing by Shilpi Majumdar)