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Boeing Wins First New 737 MAX Order in 2020

By Lou Whiteman – Aug 19, 2020 at 4:17PM

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The order, though likely priced at a discount, is a symbolic win for the beleaguered aerospace giant.

Boeing (BA -1.73%) secured its first new order for the 737 MAX since November on Tuesday, announcing an order from Polish charter airline Enter Air for two aircraft, with an option for two additional jets.

A two-plane order in normal times wouldn't make for much of a headline, but given the troubles the 737 MAX has encountered, any new order is noteworthy. The plane has been grounded since March 2019 after a pair of fatal accidents, and Boeing has endured a large number of cancellations in recent months as airlines and leasing firms adjust delivery schedules due to the COVID-19 pandemic.

A Boeing 737 MAX in flight.

Image source: Boeing.

Enter Air is Poland's largest charter carrier and to date has operated an all-Boeing fleet. Assuming the options are exercised, Enter Air would operate ten 737 MAX planes to go along with 22 737-NGs.

The new order won't do much to solve Boeing's issues, which include more than 400 planes built but not yet delivered due to the grounding. But it is a symbolic win for the aerospace manufacturer, which has been forced to cut back production of the 737 MAX and other aircraft due to the pandemic, and is readying a second round of job cuts.

Ihssane Mounir, Boeing's senior vice president of commercial sales and marketing, said the company is "humbled by Enter Air's commitment to the Boeing 737 family."

Terms of the deal were not disclosed, but odds are strong Enter Air got a good deal on these planes. In addition to the sale, the two sides also finalized a settlement to address the commercial impact of the 737 MAX grounding. Boeing said compensation will be provided "in a number of forms" and staggered over a period of time.

The settlement also reworks the delivery schedule for previously ordered aircraft, likely pushing back delivery dates. But from Boeing's perspective, it is important to see a customer recommit to the aircraft.

"Despite the current crisis, it is important to think about the future. To that end, we have agreed to order additional 737-8 aircraft," Enter Air general director and board member Grzegorz Polaniecki said in the statement. "Following the rigorous checks that the 737 MAX is undergoing, I am convinced it will be the best aircraft in the world for many years to come."

Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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