Shares of Boeing (NYSE:BA) continued their upward climb on Tuesday after European regulators cleared the way for the company's 737 MAX to return to service. It appears at least one European airline is eager to buy, helping send Boeing shares up 5% in midday trading.
Boeing has had a rough year, weighed down by issues with the 737 MAX and the pandemic's impact on commercial aviation. Both of those headwinds have been receding of late, however, with the Federal Aviation Administration (FAA) giving the green light for the MAX to fly again in the U.S. and airlines getting a boost from progress toward finding a COVID-19 vaccine.
On Tuesday, the European Union Aviation Safety Agency (EASA) indicated it was in agreement with the FAA, publishing a proposed air directive indicating its intent to approve the aircraft's return to European skies in the weeks to come. That's welcome news for Irish discounter Ryanair. CEO Michael O'Leary told Reuters he wants to be "at the front of the queue" to buy the MAX, calling the plane "a great aircraft."
While the European approval was expected, O'Leary's comments are great news for Boeing and its investors. The real question lingering over Boeing shares right now wasn't whether or not the MAX would eventually be allowed to return to service, but the status of the market when it does.
Boeing still has an uphill challenge ahead, with airlines scaling back growth plans due to the pandemic. But the regulatory approval and Ryanair's willingness to buy are steps in the right direction, and investors are celebrating those developments on Tuesday.