Boeing on Tuesday won its first order for 737 Max planes since the jets were grounded worldwide in March after two fatal crashes. The vote of confidence from British Airways' parent sent shares of the manufacturer sharply higher.
International Consolidated Airlines Group, or IAG, signed a letter of intent at the Paris Air Show to order 200 Boeing 737 Max planes. Boeing won't post the planes on its monthly order tally until the agreement is finalized.
Aviation authorities grounded the Boeing 737 Max worldwide after two crashes within five months killed a total of 346 people. Boeing and airlines are awaiting approval from regulators to resume flights with the jets, but officials have said they have no firm timeline so far.
Boeing shares surged 5.4% to close at $373.96, outpacing the broader market and leading the Dow Jones Industrial Average higher. It was their biggest one-day percentage gain in almost five months.
IAG will use the jets order, which includes the 737 Max 8 and the larger Max 10 that Boeing is developing, for short-haul flights across its airlines, which also include Iberia, Aer Lingus and low-cost carriers Vueling and Level. The group's narrowbody fleet is mostly A320s made by Boeing's chief rival, Airbus.
"We have every confidence in Boeing and expect that the aircraft will make a successful return to service in the coming months having received approval from the regulators," said IAG CEO Willie Walsh.
Boeing cut production of the 737 Max, its best-selling aircraft ever, by one-fifth and suspended deliveries of the planes after they were grounded.
The surprise order is welcome news for Boeing, which entered the air show hamstrung by the fallout from the crashes. It faces several investigations and lawsuits, customer airlines that have had to cut flights during the peak summer travel season due to the planes' grounding, and passengers who may be too skittish to fly the 737 Max once regulators give it a green light.
The order would be worth $24 billion at list prices, Boeing said, but airlines often receive discounts. The planes that IAG is planning to buy would be delivered between 2023 and 2027.