Tuesday, December 19, 2023

Lufthansa orders a mix of Boeing and Airbus planes totaling 200

Lufthansa has ordered a total of 200 aircraft, 80 firm orders, and 120 options for Airbus A220s, Airbus A320neos, and Boeing 737 MAXs. The order is valued at $9 billion at list prices.

Focusing on the Boeing orders, Lufthansa Group announced Tuesday a landmark 737 MAX order for up to 100 jets that will see Europe's largest airline group restore the Boeing 737 family into its fleet. This commitment includes a firm order for 40 737-8 airplanes with 60 options.

"It is a good strategic decision for the Lufthansa Group to order Boeing 737 aircraft again for the first time since 1995," said Carsten Spohr, chairman of the Executive Board and CEO of Deutsche Lufthansa AG. "Around 60 years ago, Lufthansa was co-developer and launch customer of this globally successful model [the 737]. With the new modern, quiet, economical, and efficient 737-8 aircraft, we are making progress both in modernizing our short- and medium-haul fleet and in achieving our carbon CO2 reduction targets."

Boeing says the 737 MAX reduces CO2 emissions by 20% and has a 50% smaller noise footprint compared to older-generation airplanes.

"We are delighted to see the 737 return to an original launch customer's fleet," said Stan Deal, president and CEO of Boeing Commercial Airplanes.

Lufthansa launched the Boeing 737 in 1967, taking delivery of the first of 146 737s until its final delivery of a 737-300 in 1995. The airline retired its last 737 in 2016 as it started its group-wide fleet modernization program.

Lufthansa wide-body orders

The Lufthansa Group has placed a series of wide-body orders in recent years to accelerate the replacement of older airplanes. Its current backlog includes firm orders for 34 787 Dreamliners, seven 777-8 Freighters, and 20 777-9 airplanes.

Price upgrade for BA shares

The Lufthansa order may provide more fuel to the fire in the upward trend in Boeing’s stock. Market analysts say good news concerning the 737 MAX jet is driving the price higher.

News indicating improved delivery performance and the growing belief in its sustainability caused Deutsche Bank analyst Scott Deuschle to upgrade Boeing’s rating from Hold to Buy on Monday and bumped his price target up from $270 to $320. The new price target implies shares could gain another 22% in the months ahead.

On Tuesday, the pre-market price for Boeing (NYSE: BA) was up 0.30% ($0.79) at $261.20 per share.

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