Boeing Co. (NYSE:BA) is edging closer to securing a massive aircraft order from China that could involve as many as 500 jets, which could mark the end of a years-long sales drought in the world’s second-largest aviation market.
Last major Boeing order from China dates back to President Donald Trump’s 2017 state visit.
News of the potential breakthrough lifted Boeing shares. The stock is up 27% year to date, buoyed by a turnaround effort under CEO Kelly Ortberg.
Also Read: Boeing’s Decades-Long 737 Delivery Record Could Finally Fall To Arch-Rival Airbus
Bloomberg reported that negotiations are ongoing regarding details such as the aircraft types, the delivery schedule, and the order size.
The deal is still contingent on the United States and China maintaining progress in easing trade tensions, which flared during Trump’s first term.
While the talks could collapse, Bloomberg reported that officials in Beijing have already begun consulting with domestic airlines about future fleet needs, signaling preparations for a large-scale purchase.
The transaction under discussion is expected to rival China’s recent agreement with Airbus SE (OTC:EADSY) (OTC:EADSF) for up to 500 planes, which has not been publicly announced.
Boeing forecasts that China’s commercial fleet will more than double to 9,755 aircraft over the next two decades, far outpacing the output of its state-backed competitor, Comac.
Since 2019, when Chinese regulators grounded the 737 Max following two fatal crashes, Airbus has dominated aircraft deliveries to the country.
In the past six years, Boeing has managed only 30 new orders from Chinese carriers and leasing firms.
Boeing reported stronger-than-expected revenue for the second quarter, driven by a sharp rise in commercial aircraft deliveries. However, its adjusted loss per share was wider than Wall Street projections.
Revenue climbed 35% year over year to $22.75 billion, beating the Street estimate of $20.20 billion, led by higher delivery volume and improved operational performance.
Boeing delivered 150 commercial airplanes in the quarter, up 63% from a year ago. The total company backlog rose to $619 billion, including more than 5,900 commercial aircraft orders valued at $522 billion.
The aerospace giant is also looking at a possible hindrance in production as over 3,200 workers rejected a new contract offer in Illinois and Missouri.
Price Action: BA stock is trading higher by 1.94% to $230 at last check Thursday.
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