Boeing Co (NYSE: BA) has received a major endorsement from Korean Air, despite recent setbacks involving the airline’s Boeing 737 Max 8.
At the Farnborough Airshow on Monday, Korean Air placed an order for 40 new wide-body planes from Boeing, including the highly anticipated 777X model and the 787-10 Dreamliners.
This substantial commitment highlights ongoing confidence in Boeing amid recent challenges. Boeing stock opened about 1.0% up after receiving the Korean Air order on Monday.
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Korean Air orders Boeing 777X and Dreamliners
The order from Korean Air encompasses 20 Boeing 777X aircraft and 20 787-10 Dreamliners.
Both models are designed for long-haul routes, with the 777X being Boeing’s largest commercial airliner and the 787-10 known for its efficiency on extended flights.
Additionally, Korean Air has the option to acquire 10 more Dreamliners in the future. Korean Air’s CEO, Walter Cho, anticipates that deliveries will commence before the decade’s end.
Boeing has recently initiated certification flight tests for the 777X with the Federal Aviation Administration (FAA).
Although this marks a step forward, the development of the 777X is still behind schedule.
The new orders come just one week before Boeing is set to release its financial results for the second quarter.
Analysts forecast a loss of $1.40 per share for Q2, a sharp decline from the 82 cents per share reported in the same period last year.
Boeing faces challenges but remains optimistic
Despite supply chain disruptions and safety concerns that have caused Boeing’s stock to drop nearly 30% in 2024, Korean Air’s endorsement underscores continued confidence in Boeing’s capabilities.
Walter Cho expressed strong faith in Boeing’s recovery, stating, “If I wasn’t assured, I wouldn’t have ordered it. I know Boeing will pull through whatever it is they’re going through right now.”
Earlier this year, Korean Air also placed orders for Airbus A350-1000s, indicating a competitive approach to fleet expansion.
Cho emphasized the importance of timely deliveries for both Boeing and Airbus, noting that whichever aircraft is delivered first will become the airline’s flagship.
The new orders are a crucial boost for Boeing as it seeks to restore its reputation and competitive edge in the commercial aviation sector.
On July 1st, Boeing announced plans to repurchase Spirit AeroSystems to address ongoing manufacturing defects, following Airbus’s acquisition of parts of Spirit’s operations to strengthen its own supply chain.
Stephanie Pope, Boeing’s new head of the commercial unit, acknowledged the impact of delayed deliveries on customer satisfaction but assured that the company is undergoing a “transformational change.”
She confirmed that Boeing is committed to ramping up production of the MAX airliner to 38 units per month in the coming months.
As Boeing navigates through its current challenges, the substantial order from Korean Air represents a significant vote of confidence and a critical step toward regaining momentum in the global aviation market.
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