Boeing Soars on Akasa Order, but Safety Clouds Threaten

London: 19 January 2024 (TraderMade): Akasa Air takes center stage at Wings India 2024, igniting Boeing's engines with a colossal order for 150 737 Max jets.

This mix of fuel-efficient 737-10s and workhorse 737-8-200s will not only supercharge Akasa's capacity and range but also paint the Indian sky with their new livery as the airline eyes both domestic and international expansion.

The Boeing stocks (BA) gained 6.1% last week and were $211.69 by about 01:25 PM GMT.

This deal catapults Akasa's total Boeing order book to a staggering 226 planes, solidifying its ambition to capture a bigger slice of the rapidly growing Indian aviation market.

Clouds of Safety Concerns

However, a storm cloud of safety concerns hovers above the Boeing-Akasa deal. The recent fuselage panel incident on a 737 Max 9 in the US has cast a shadow on the entire family, with the FAA grounding all 737 Max 9s for inspection.

Though Akasa thankfully operates only the uncompromised 737 Max 8 variant, the wider safety scrutiny adds a layer of uncertainty to Boeing's delivery schedules.

Further fueling the flames are China's stringent responses. Following the incident, China Southern Airlines intensified its safety checks on Boeing 737 Max aircraft. The Chinese authorities have mandated additional inspections for all 737 Max planes within the country. This could potentially delay deliveries and impact Boeing's production plans.

A Brief History of Boeing's Plummet

Boeing stocks fell in March 2019 after the second 737 Max 8 plane crashed. Recently, Boeing stocks fell due to Max 9 groundings a week ago. The Boeing stock price crashed to $199.51001 on 16 January.

Analysts weigh in, reflecting the cautious optimism. While Wells Fargo acknowledges the Akasa deal as a positive signal, it downgrades Boeing stock due to the heightened delivery risk arising from the FAA inspection and Chinese regulatory actions. Wells Fargo also slashes its price target on BA stock, reflecting the potentially bumpy road ahead.

Fingers Crossed For Safe Landing

Akasa Air's monumental order sends Boeing stocks soaring, but the lingering safety concerns paint an incomplete picture. Market participants should buckle up for a turbulent ride, closely monitoring regulatory developments and their potential impact on Boeing's delivery timelines and stock performance.

The skies may be filled with new Akasa Air planes soon. However, only time will tell if Boeing can navigate the turbulence and land smoothly.