Tuesday, February 14, 2023

Biden announces a Boeing and Air India deal for more than 200 jets

Air India will purchase more than 200 planes from Boeing, President Joe Biden announced Tuesday. It’s the third biggest sale of all time for the aircraft manufacturer.

The agreement will include 190 Boeing 737 MAXs, 20 Boeing 787s, and 10 Boeing 777Xs – a total of 220 firm orders valued at a list price of $34 billion, the official says.

Airlines do not pay full list price for commercial jets, especially when placing an order this large. But even a discount of 50%, which is not unusual, would mean a sale valued at $17 billion. That’s an important lift to a company still struggling to recover from the plunge in revenue and financial losses it suffered during the pandemic and the 20-month grounding of its 737 Max following two fatal crashes.

Boeing’s 2022 revenue came in at $66.6 billion, up $8 billion from the trough in sales in 2020, but far lower from its record 2018 revenue of $101 billion before the grounding. Boeing gets most of its sales revenue once a plane is delivered, and the 777X has yet to be built. The planes in this order are years away from delivery.

The Air India purchase will also include customer options for an additional 50 Boeing 737 MAXs and 20 Boeing 787s, totaling 290 airplanes. At list price, that order would be valued at $45.9 billion.

In a statement, Biden said the sale would “support over one million American jobs across 44 states, and many will not require a four-year college degree.”

“This announcement also reflects the strength of the U.S.-India economic partnership,” Biden wrote. “Together with Prime Minister Modi, I look forward to deepening our partnership even further as we continue to confront shared global challenges — creating a more secure and prosperous future for all of our citizens.”

Production will support three separate U.S.-based manufacturing lines, have a total economic impact of $70 billion across the United States and support an estimated 1.47 million direct and indirect jobs, a White House official said Tuesday.

14/02/23 Nikki Carvajal/CNN

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