Source: PaxForex Premium Analytics Portal, Fundamental Insight
Two Boeing (BA) 737 Max customers are fulfilling their orders, but are delaying shipments after the aerospace giant saw a wave of cancellations as the coronavirus has suppressed demand for air travel. Boeing shares reportedly jumped as the hedge fund bought back their debt.
Japanese air leasing company SMBC Aviation Capital said it was delaying the delivery of 68 Boeing 737 Max aircraft for four years until 2025-2027.
The company told Reuters that it does not expect any deals with Boeing 737 Max to be canceled "at this time".
In May, AerCap (AER), another aircraft leasing company, said it was delaying delivery of another 37 aircraft by 2023 and then by 2021-2022 as the company expected to save cash.
Meanwhile, Boeing will provide compensation to Europe's largest travel company TUI Group for the delayed delivery of 737 Max.
TUI, which manages hotels, airlines and cruise ships, will keep its orders for the 737 Max despite the delays.
Retention deals come after customers canceled a total of 150 Boeing 737 Max orders in March and 108 in April as airlines struggle with extremely low demand in the Coronavirus Pandemic.
Meanwhile, Dan Loeb's Third Point Offshore Fund named Boeing one of the "winners" in May, according to Business Insider. CNBC also reported that the hedge fund bought part of the Boeing debt.
The company said in late April that it would not seek assistance from the government after selling $25 billion worth of bonds, which is needed to strengthen its position in cash.
The stock jumped 13% to 173.16 on the stock market, reaching its highest level since late March. According to the analysis of the MarketSmith chart, the stock rose even above its 50-day average, but still far behind the 200-day line. The top supplier of the Boeing 737 Max, Spirit AeroSystems (SPR), rose 21%. General Electric (GE), the engine supplier, rose 4.4%.
Boeing resumed production of the troubled 737 Max last month after installing Covid-19 protection equipment at its Seattle plants. But regulators have not allowed it to be put back into operation. The plane was landed in March 2019 after two fatal accidents.
Steve Dixon, head of the Federal Aviation Administration, will testify on June 17 at a hearing in Seattle on "issues related to the design, development, certification and operation" of the Boeing 737 Max.
Earlier this year, the House Transport Committee recognized that the FAA certification audit was "extremely insufficient".
