Boeing (BA) rival Airbus (EADSY) could see higher sales of its Airbus 320 jets as airlines slash orders for Boeing 737 Max jets in the wake of Sunday’s deadly Ethiopian Airlines crash. President Emmanuel Macron is actively promoting orders for the European aerospace giant. Airbus stock fell on the stock market Thursday but is up sharply this week. Boeing stock edged lower.
In total $600 billion in Boeing jet orders are at risk, according to Bloomberg.
A French official has confirmed President Macron held talks with Ethiopian Prime Minister Abiy Ahmed over a new contract for Airbus for Ethiopian Airlines. All the airline’s current jets, outside of some Airbus A350 widebody planes, are from Boeing.
Macron also will discuss a major Airbus order with Xi Jinping when the Chinese president makes a state visit to France later this month. China was the first major country to ground the Boeing 737 Max after Sunday’s crash. The world’s fastest growing aviation market is a major Boeing customer, taking 20% of all Boeing 737 Max jets delivered so far.
Indonesia Carriers Cut Boeing 737 Max Orders
Indonesian carrier Lion Air, who lost 189 passengers and crew after one Boeing 737 Max jet crashed in October, plans to switch a $22 billion order to Airbus. Garuda Indonesia is looking to further reduce an order for the controversial aircraft. It had already cut its order for 49 737 Max jets to 20 before last October’s deadly Lion Air flight 610 crash. It is said to be open to switching suppliers.
Meanwhile VietJet is mulling over the future of a $25 billion order for 200 planes, while Kenya Air is reconsidering tentative plans to place an order.
Airbus Stock Flies High
Shares fell 0.8% to 32.97 on the stock market today after soaring 6.8% Monday-Wednesday. Airbus stock is extended from a 29.38 buy point from a 24 week cup-with-handle base, MarketSmith analysis shows. Its relative strength line is at an all-time high on the weekly charts, reflecting its strong recent performance.
The Stock Checkup Tool shows Airbus stock has a EPS Rating of 81, with earnings growing by an average of 79% over the past three quarters. However its three year earnings growth rate of 14% is not ideal. Airbus stock has been performing well technically, which is why it has a Relative Strength Rating of 90.
Boeing stock dipped 1% after tumbling earlier this week. Boeing fuselage supplier Spirit AeroSystems (SPR) was off 1.6%. General Electric (GE), whose CFM International joint venture with Safram supplies the 737 Max engine, rose 2.8% after GE said it sees “better” overall company performance in 2020.
More Countries Ban Boeing 737 Max
Russia, Japan and Tunisia all banned the Boeing 737 Max from their airspace Thursday. The moves came after President Donald Trump ordered the FAA Wednesday to ground all Boeing 737 Max jets, after a growing number of regulators around the world suspended the jet in the wake of two fatal crashes in five months.
French investigators took charge of the crashed Ethiopian Airlines jet’s black boxes Thursday as a probe continues. The Bureau of Enquiry and Analysis for Civil Aviation Safety will now examine the flight data and cockpit voice recorders, a process that could take days.
Boeing Beat Airbus In 2018
Boeing gave rival Airbus a spanking in 2018 when it comes to jet orders. The Dow Jones stock racked up a total of 893 orders during 2018, while Airbus managed just 747 during 2018. The latter figure was a steep decline from the 1,109 net orders in 2017.
Boeing’s 806 deliveries also edged past those from Airbus, which hit its lowered target to deliver 800 aircraft last year, up from 718 in 2017.
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