Shares of The Boeing Company (NYSE: BA) surged in the pre-market trading Monday following a Bloomberg News report indicating that China is actively considering restarting the procurement of Boeing’s 737 Max aircraft. The potential breakthrough is anticipated to be discussed this week as U.S. President Joe Biden and Chinese President Xi Jinping convene at the APEC summit.
Although President Xi is not expected to unveil a formal order for the 737 Max during the summit, the report suggests aircraft commitments in such situations take the form of a memorandum of understanding or letter of intent, with the specific terms still under negotiation. The report cautions that these terms could undergo changes or even dissolve before the leaders meet on Wednesday.
The Boeing Company (NYSE: BA) continues to await the resumption of deliveries for its bestselling 737 MAX aircraft to Chinese airlines, suspended over four years following two deadly crashes. The company had said that as of the end of June, approximately 90% of Boeing’s 737 Max jets in China had resumed commercial operations.
The aviation giant has faced challenges securing new orders from Chinese carriers since 2017 amid escalating political and trade tensions between Beijing and Washington. However, a potential agreement on the 737 Max could mark a pivotal moment for Boeing in the Chinese market.
In a recent forecast update in September, Boeing expressed optimism about future deliveries to China, citing economic growth and a surge in domestic travel demand. The U.S. planemaker projected that China’s fleet would more than double to nearly 9,600 jets over the next two decades, anticipating its domestic aviation market to become the world’s largest by the end of the forecast period. This projection includes a demand for 6,470 single-aisle planes, such as the Boeing 737 MAX family.
Boeing stock is up 3.69% to trade at $203.91 at the time of publication.