Reason Why Boeing Stock is Rocketing Higher
Stock in aerospace giant Boeing is rising again because airlines are scheduling more flights. The rebound is happening a bit fast than many anticipated, posing a challenge to Wall Street’s bearish assumptions concerning commercial aerospace’s future.
The company’s stock price has been on the rise after announcing that it intended to commence the troubled 737 MAX jet production.
The MAX had been grounded worldwide since mid-March 2019 after two deadly crashes within two months. Three hundred forty-six people died in the two accidents: an October 2018 crash of a jet operated by Lion Air, and a March 2019 crash of a plane operated by Ethiopian Airlines.
Boeing management was tasked with fixing its software and other concerns and now intends to start delivering rectified planes to airline customers by the end of 2020.
The crash and fallout saw BA stock sold out last year. It had another meltdown early this year after air-travel demand disappeared as Covid-19 spread.
During March this year, the shares were down about 80% before turning up again. The year-to-date declines have shaved about $80 billion off Boeing’s market value. That is nearly twice as severe as 2019 declines related to the troubled 737 MAX jet.
To preserve cash, the company had to suspend its dividend on March 20 and extended its pause on share buybacks until further notice.
Currently, the company’s stock has started to rebound after the economy reopened in May, and airlines began recording an upward momentum in travel demands.
At first, the shares fell sharply in July as coronavirus brought everything to a standstill in the US but slowly climbed back following positive remarks from European aviation regulators concerning 737 max.
Boeing’s market is now at $100 billion following positive Covid-19 vaccine news from Pfizer in November.
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