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UPDATE 2-Airbus hits record highs, 737 MAX buyers fall on latest Boeing news

UPDATE 2-Airbus hits record highs, 737 MAX buyers fall on latest Boeing news
File photo Image Credit: Pixabay

Airbus' shares hit record highs on Wednesday after U.S. arch-rival Boeing warned of further delay in returning its grounded 737 MAX airliner to service, while Boeing customers and suppliers fell on the news.

Boeing said on Tuesday that it did not expect to win approval for the 737 MAX to return to service until mid-year. Airbus was up by 1.85% at 138.9 euros at 1215 GMT, the top performer on France's benchmark CAC-40 index after hitting a record high 139.32.

But shares in airlines waiting to fly the 737 MAX including TUI Group and Norwegian, fell. TUI shares fell 5% to their lowest level since September and led losers on London's FTSE 100. The delay means TUI will not have all the planes it hoped to have in time for the summer when it makes the bulk of its profits.

In December, TUI warned that if the 737 MAX was not back in service by May that could wipe off as much as 400 million euros ($444 million) from its annual earnings. Norwegian shares were down 1.9%. It said that it was in close dialogue with both Boeing and the authorities.

"We are continually taking steps to minimize any disruption to the journeys of our passengers during our summer 2020 program," a spokesman for Norwegian said. Shares also fell in Boeing suppliers, including France's Safran and Britain's Senior which make the engines for the 737 MAX with General Electric.

Boeing said that the delay was due to further potential developments in the certification process and regulatory scrutiny of its flight control system. The 737 MAX, Boeing's best-selling aircraft, was grounded last March following two crashes which claimed 346 lives.

British Airways parent firm IAG, which announced a non-binding order for 200 MAX jets last June in a rare piece of good news for Boeing since the grounding, is "still progressing with Boeing", Chief Financial Officer Steve Gunning told Reuters in Dublin on Wednesday. "I think we're still confident Boeing will get this back in the sky," Gunning said, adding that the 2024 delivery timeframe left IAG with some room for maneuver.

Another top 737 MAX buyer, Ryanair, declined to comment. Its chief marketing officer said this month the Irish budget carrier thought it was possible it might take delivery of up to 10 737 MAX aircraft by April. ($1 = 0.9017 euros)

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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