What happened
Boeing (BA -0.62%) has inked a new plane order from Delta Air Lines (DAL -0.23%) worth upwards of $13 billion, and its stock is up as a result. Shares of Boeing traded as much as 5% higher on Monday morning.
So what
Boeing has been flying through turbulence for three years now. Shares of the aerospace giant have lost more than half of their value since the beginning of 2020 due to engineering issues and the pandemic's impact on airlines. With fewer people flying through much of 2020, there wasn't much demand for new airplanes.
On Monday, Boeing secured a big customer win. Delta, which has mostly done business with Boeing archrival Airbus (EADSY -1.08%) in recent years, has placed an order for 100 Boeing 737 MAX jets with an option for 30 more. Delta likely will pay well below list price for an order this size, but at list price the deal is worth more than $13 billion to Boeing.
The agreement also gives Boeing a potential ally as it works to win regulatory approval for the jet. The version of the 737 MAX that Delta hopes to buy has not yet been approved by regulators, and if Boeing cannot secure that approval before year's end, it could be forced to go through a costly upgrade of its cockpit system.
Delta listed the cockpit design, which is similar to other 737 models, as a selling point for the plane.
Now what
The announcement is a good start to what should be a very busy week for Boeing. Airlines and aerospace companies are gathered in Farnborough, England, for one of the world's largest annual airshows, a time when deals historically get signed and announced.
The Delta win is not unexpected, but it is still an important milestone in Boeing's effort to pay down its debt and recover from the pandemic. That recovery will take years, and investors would be wise not to get too excited as the press releases roll out of England this week, but Boeing appears to be making slow progress on those fronts.
