Boeing stock jumped Thursday after the Dow Jones plane maker secured a deal with El Al Israel Airline worth up to $2.5 billion. Elsewhere, the U.S. approved another $20 billion in arms sales to Israel.
Boeing Thursday morning announced it reached an agreement with El Al for up to 31 of its 737 MAX jets. The new MAX planes would replace El Al's current all-Boeing fleet of 737-800 and 737-900 aircraft, according to reports.
El Al agreed to purchase 20 737 MAXs for $1.5 billion, with the option for 11 additional planes. Deliveries could begin as early as 2027, Barron's reported.
The deal comes after El Al earlier this year purchased three additional 787-9 aircraft with the option for six more as the airline expands its 787 Dreamliner fleet. Boeing will deliver one new 787-9 this year, and will lease two more to El Al in the coming years.
Boeing this year has grappled with quality control issues following midflight malfunctions, sparked by the Alaska Airlines emergency landing in January. The Dow Jones giant named Robert Kelly Ortberg the new president and CEO on Aug. 8. Ortberg replaced Dave Calhoun, who announced plans to retire in March.
Elsewhere, President Biden's administration on Tuesday approved an additional $20 billion in arms sales to Israel, following concerns of wider escalation in the Middle East. The sales include more than 50 F-15 fighter jets. Boeing is the prime contractor for the F-15s. The sales also includes Advanced Medium Range Air-to-Air Missiles (AMRAAMs) and 120 mm tank ammunition, as well as high explosive mortars and tactical vehicles, the AP reported. The earliest deliveries aren't expected to begin until 2026.
Boeing Stock Rises On The News
Boeing stock surged 4.7% Thursday following the El Al news, rebounding above its 21-day line.
Shares had been trading around April lows since the star of August. Boeing stock tumbled 32% this year amid the mechanical issues.
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