Boeing Co (NYSE:BA) is moving up 1.8% Monday, after news broke over the weekend that BA and Qatar Airways struck an $18.6 billion deal for 100 airplanes.
Qatar had previously worked with Airbus, but the company suffered delivery setbacks and prompted Qatar to do business with rival Boeing.
The deal is part of Qatar’s plan to upgrade its fleet of 737 airliners and extend its operations. Included in the deal are 30 787-9 Dreamliners and 10 777-300ERs, which has a cumulative market value of approximately $11.7 billion, the largest order ever placed by Qatar.
This is great news for Boeing stock holders, as orders for widebody planes have been on the decline lately. The deal, too, could allow Boeing to increase its revenues and deliveries.
Qatar also has the option to buy 60 of BA’s 737 jetliners for a total of $6.9 billion. The Middle Eastern airliner reportedly planned to purchase the planes from Airbus, but rejected Airbus’ A320 deliveries due to engine issues.
According to Qatar Airways Group Chief Executive Akbar Al Baker, Qatar Airways “is already one of the fastest growing airlines in the history of aviation” and Boeing “has proven to be a valuable partner.”
The BBC reports that politics may have played a hand in determining the final seller of the planes.
The Qatar government reportedly may have helped delay the Boeing order to persuade the U.S. government to approve a deal for sending Boeing fighter jets to Qatar.
Boeing will next report earnings on Oct. 26, when the company is expected to earn $2.60 per share on $23.7 billion in sales.
As of this writing, John Kilhefner did not hold a position in any of the aforementioned securities.