Shares of Boeing Co. turned higher Monday after American Airlines Group Inc. included the aerospace giant’s troubled 737 Max line in its orders for 260 new aircraft, which aims at boosting premium seating by 20%.
American said its orders include 85 Boeing 737 Max 10s, 85 Airbus A321neo and 90 Embraer E175 aircraft, with options and rights to buy an additional 193 aircraft.
As part of the Boeing orders, American said it “upgauged” 30 existing 737 Max 8 orders to 737 Max 10 aircraft.
Boeing’s stock
BA,
gained 0.5% in midday trading, after trading down as much as 1.5% earlier in the session. The gain comes after the stock closed at a four-month low of $200.00 on Friday.
The U.S.-listed shares of Airbus SE
EADSY,
AIR,
rose 2% on Monday, and those of Embraer S.A.
ERJ,
EMY,
advanced 3.1%.
Meanwhile, American Airlines stock
AAL,
swung to a loss of 4%, from a gain of as much as 3.1% before the orders announcement.
“We deeply appreciate American Airlines’ trust in Boeing and its confidence in the 737 MAX family,” said Stan Deal, chief executive of Boeing Commercial Airplanes. “American’s selection of the 737-10 will provide even greater efficiency, commonality and flexibility for its global network and operations.”
The orders come as Boeing has been dealing with a call from regulators to fix problems with quality regarding the 737 Max jets.
Read: FAA gives Boeing 90 days to come up with plan to improve safety and quality problems.
Also read: Boeing confirms talks with Spirit AeroSystems as it aims to ‘improve quality.’
American said the orders are part of its plan to expand premium seating across its narrow-body and regional fleets and to upgrade its fleet to more efficient aircraft.
The air carrier expects premium seating in its fleet to grow by more than 20% by 2026.
“The aircraft orders support American’s measured growth into the next decade and smooth the delivery schedule in the coming years,” American said.
Including the new orders, American said it expects to remain within its previously announced guidance for capacity and capital expenditures.
In January, the company said it expects 2024 capacity to grow in the mid-single digits percentage range and aircraft capex to be about $2.3 billion.
