PARIS -- Boeing Co. won a big endorsement for its troubled 737 Max aircraft, as the parent company of British Airways promised to build its future short-haul fleet around the model with a plan to buy 200 jets, the aerospace company announced Tuesday at the Paris Air Show.
Boeing said it's the first sale of the jetliner since the crash of an Ethiopian Airlines 737 Max in March. Another 737 Max crashed in Indonesia last year. All planes of the same model are now grounded during an investigation of problematic software.
The letter of intent is subject to final agreement, but is a vote of confidence in Boeing as it struggles to win back trust from airlines, pilots, regulators and the traveling public.
The combination of 737 Max 8 and 737 Max 10 planes would cost $24 billion at list prices, though companies usually strike deals for discounts. The planes would be delivered between 2023 and 2027 to airlines owned by International Airlines Group.
Boeing climbed as much as 5.4% to $373.96 in New York for the biggest intraday gain since Jan. 30.
International Airlines expressed optimism that regulators will allow amended Max jets to fly again soon. But it's unclear when that will be, notably for regulators outside the U.S.
By signing a letter of intent instead of a firm order contract, International Airlines gains an insurance policy of sorts for a jetliner whose immediate future is still uncertain, said aerospace analyst Richard Aboulafia.
The Ethiopian Airlines and Lion Air crashes killed 346 people. Boeing executives started off the Paris Air Show on Monday with a sweeping apology to victims' families and airlines.
Analysts had predicted that Boeing might try to announce some Max orders at the air show to demonstrate that the plane -- one of Boeing's most popular models -- still has support.
The pact ends months of unrelentingly bad news for Boeing's flagship aircraft, which the company is struggling to return to the skies as a grounding enters its fourth month. International Airlines' willingness to bet on the model provided a special boost because chief executive Willie Walsh is a former 737 pilot who has flown a Max simulator equipped with an update to a software system implicated in both crashes.
"I wouldn't ask anybody to do something I wouldn't do myself," Walsh told reporters at the air show. "If you ask me, I would get on board a Max tomorrow."
The CEO said Boeing botched communication with regulators and is promising more transparency.
Boeing depends heavily on the aircraft and has said it is costing at least $1 billion to address problems with the troubled jet. But the company has struggled to get a handle on the Max controversy.
After lackluster sales in recent months, Boeing's orders picked up Tuesday. It also announced a deal with Korean Air and Air Lease Corp. for a total of 30 long-range 787 jets, worth $6.3 billion at list prices.
European rival Airbus also announced several orders Tuesday. Before announcing its Boeing Max deal, International Airlines signed a firm order with Airbus for new A321XLR long-range jets, for its airlines Aer Lingus and Iberia.
Airbus also reported sales to Delta Air Lines, Saudi Arabian Airlines and Atlantic Airways, and announced a feasibility study for vertical takeoff and landing aircraft that could shuttle visitors to the Paris 2024 Olympics.
With the Max deal, Boeing upended what looked to be a cakewalk for Airbus at this year's Paris trade fair. As of Tuesday afternoon, Boeing had pulled ahead of its European rival with a total of $31.8 billion in deals over two days, with Airbus about $150 million behind. The amounts are based on list prices, before customary discounts.
Both Airbus and Boeing face a slowing economy that tempered the mood at the air show.
The companies, along with other manufacturers, came together Tuesday to promise more investment in reducing aviation emissions even as global air travel is expected to rise significantly in the decades to come.
Plane-makers are under increased pressure from regulators and passengers concerned about climate-damaging emissions. They are looking at hybrid, electric or hydrogen technology to eventually replace existing fuel.
Information for this article was contributed by Angela Charlton and David Koenig of The Associated Press; and by Julie Johnsson and Benjamin Katz of Bloomberg News.
Business on 06/19/2019