The Federal Aviation Administration gave clearance to Boeing to begin deliveries of the 787 Dreamliner after approving the company’s plan to correct production problems with the aircraft.
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Boeing investors got two bits of good news Monday that was sending the higher. One item was a far bigger deal than the other.
The plane maker temporarily avoided a strike at three plants that make military gear, and U.S. regulators approved the company’s plan for validating repairs to the 787 twin-aisle jet.
Avoiding the strike is a small positive. The ability to resume 787 deliveries will be a big relief for investors.
Boeing (ticker: BA) stock rose 4.8% in premarket trading to about $167 a share. Coming into the session, the stock has fallen almost 21% this year, while the S&P 500 and Dow Jones Industrial Average have declined about 13% and 10%, respectively.
Boeing hasn’t delivered 787 jets in more than a year. The last delivery was in June 2021. Boeing stopped delivering the planes after quality problems were found in manufacturing.
Over the weekend, the Federal Aviation Administration gave clearance to Boeing to begin deliveries of the 787 Dreamliner, according to reports. Aviation Week was the first to report on the FAA’s approval. Boeing didn’t immediately respond to a request for comment.
The approval clears the way for Boeing to deliver roughly 120 jets that were built and parked. It will take time for all those jets to be delivered, but the approval could mean there is upside to Boeing earnings estimates for the balance of 2022. Currently, Wall Street projects Boeing will deliver about 85 of the 787 jets this year.
Meanwhile, a strike at three Boeing facilities in the St. Louis area was scheduled to begin Monday, but it’s been put off for a few days after the International Association of Machinists and Aerospace Workers received a new contract offer from the aerospace giant.
Boeing’s proposed three-year contract offers new workers a lump-sum payment of $8,000 and removes earlier plans to cut company contributions to employees’ 401(k) savings plans, The Wall Street Journal reported. Talks were extended through Wednesday, but a strike could begin Thursday if the proposal is rejected.
The roughly 2,500 Boeing workers represented by the International Association of Machinists and Aerospace Workers District 837 rejected a contract offer from Boeing last week.
Write to Joe Woelfel at joseph.woelfel@barrons.com
Source: finance.yahoo.com