Boeing's Max sales drought ends

Boeing announced the sale of 200 737 MAX jets to International Airlines Group Tuesday, ending a wave of cancellations and a sales drought following the worldwide grounding of the aircraft after two fatal crashes.

IAG, owner of British Airways, Iberia and Aer Lingus, made the announcement at the Paris Air Show. The new, fuel-efficient planes will be flown by budget units Level and Vueling.

"This is a vote of confidence in the Boeing 737 MAX," aviation consultant Robert Mann told China Daily. "I think (IAG CEO) Willie Walsh drove the bargain of a lifetime."

MAX jets cost about $120 million each, but the final purchase price is negotiated and remains confidential. IAC said it would buy the MAX 8, the model involved in the crashes, and the larger MAX 10.

This year, Boeing has received about 125 more cancellations than orders. Boeing has about 5,000 MAX jets from more than 100 airlines on order, making it the fastest-selling aircraft in company history.

MAX jets were grounded worldwide following crashes March 10 in Ethiopia and Oct 29, 2018, in Indonesia that killed a total of 346 passengers and crew. Preliminary investigations suggest the aircraft's automated anti-stall device forced the flights into a nosedive to gain air speed when it erroneously determined the planes were about to stall.

There are about 400 MAX jets in service worldwide, including about 97 in China. Wall Street analysts expect Boeing to spend about $1 billion to update and install new software worldwide to fix the anti-stall system. The US Federal Aviation Administration and other regulators have not re-certified the aircraft for commercial flights. If all goes well, MAX jets could return to service late this summer.

"The market has a short memory and passengers won't shun the 737 MAX," Mann said. "Airplanes that have had initial difficulty generally recover with no adverse impact. The Boeing 787 Dreamliner is a good example and now carries hundreds of thousands of people per day."

In January 2013, a lithium ion battery sparked a fire on a Japanese Airlines 787 Dreamliner parked at Logan International Airport in Boston and all planes were grounded. There were no injuries. The US National Transportation Safety Board blamed the fire on "insufficient guidance for FAA engineers to use during the certification process." The system was redesigned and the airplane returned to service four months later.

Also Tuesday, Korean Air ordered 20 Dreamliner 787-10s, the largest version of the plane, and 10 of the slightly smaller 787-9s. The estimated value of the deal is $6.3 billion before negotiated discounts.

Boeing's stock rose on news of the deal, closing Tuesday on the New York Stock Exchange at $373.96, up $19.06 a share, or 5.37 percent. The 52-week range is $292.47 to $446.01 a share.