Benzinga | Dec 4, 2020 02:40AM EST

Boeing Gets Largest 737 Max Order Since Grounding Last Year, Shares Surge 6%

Aerospace company Boeing Co (NYSE:BA)'s shares surged in the regular and after-hours session Thursday as it bagged an order from Irish airliner Ryanair Holdings Plc (NASDAQ:RYAAY) for the 737 Max jet, the two companies announced Thursday. The 737 Max airplanes were grounded in March 2019 after two fatal crashes involving the line within six months.

What Happened Ryanair has placed an order for 75 more 737 8-200 Max model jets, increasing its total order book to 210 airplanes -- the largest order for Boeing 737 Max jets since the grounding. According to Bloomberg, after accounting for sizeable discounts, the order's list value tallies to $9.4 billion, approximately.

Ryanair and Boeing said a higher passenger capacity coupled with fuel efficiency, and environmental performance were the key factors that influenced the former's decision.

Micheal O'Leary, CEO of the Irish airplane company, expects the new jets to be part of Ryanair's fleet sometime next year. He also remarked that the fuel efficiency and increased capacity with 197 seats could potentially drive down the airfares.

Why Does It Matter In mid-November, the Federal Aviation Administration in the U.S. approved the Max airplanes for take-off. The 737 Max is making a comeback after 20 months.

Talking about restoring customer confidence in its aircraft, Boeing President and CEO Dave Calhoun said the company "remains focused on safely returning the full 737 fleets to service and on delivering the backlog of airplanes to Ryanair and our other customers."

"We firmly believe in this airplane, and we will continue the work to re-earn the trust of all of our customers," Calhoun added.

Price Action BA stock gained 5.96% on Thursday to close at $237.20. Whereas, RYAAY closed at $109.59, 2.8% higher.