PARIS/LONDON (Reuters) – Airbus’ (AIR.PA) shares hit record highs on Wednesday, after U.S. arch rival Boeing (BA.N) warned of further delay in returning its grounded 737 MAX airliner to service, while Boeing customers and suppliers fell on the news.
FILE PHOTO: Grounded Boeing 737 MAX aircraft are seen parked in an aerial photo at Boeing Field in Seattle, Washington, U.S. July 1, 2019. REUTERS/Lindsey Wasson/File Photo
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 .FCHI after hitting a record high 139.32.
TUI shares fell 5% to their lowest level since September and led losers on London’s FTSE 100 .FTSE. 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 minimise any disruption to the journeys of our passengers during our summer 2020 program,” a spokesman for Norwegian said.
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 (ICAG.L), 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 manoeuvre.
Another top 737 MAX buyer, Ryanair RYA.I., 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.
(GRAPHIC – Airbus vs Boeing: here)
Reporting by Sudip Kar-Gupta in Paris, Josephine Mason in London, Laurence Frost and Conor Humphries in Dublin, Terje Solsvik in Oslo, writing by Sarah Young, editing by Louise Heavens and Jason Neely