Boeing (BA) announced a huge order for 787 Dreamliners from a pair of Saudi Arabian airlines Tuesday, with General Electric (GE) set to supply engines for the new jets. Boeing stock slumped Wednesday.
The brand-new Riyadh Air, owned by Saudi Arabia’s sovereign wealth fund, will buy 39 jets, with options to buy 33 more, Boeing said. The national carrier Saudia will also buy 39 jets, with a further 10 options, the Dow Jones aviation giant added.
The Wall Street Journal had reported Sunday on a looming Boeing-Saudi Arabia deal. The deal includes widebody jets often used in long international flights, it added.
In total, the Saudi Arabian carriers intend to purchase up to 121 787 Dreamliner jets. The new jets will be equipped with GE engines, according to The New York Times. The transaction is the fifth largest commercial order by value in Boeing’s history, the planemaker said.
Saudi Arabia is seeking to transform into a global aviation hub.
Financial terms were not disclosed. An Al Arabiya report estimated the aircraft order was worth $37 billion at list prices.
If all 121 aircraft are purchased, the Boeing Dreamliner deal will support over one million American jobs, the White House said.
The White House added it was “pleased that Boeing was able to finally conclude these deals with Saudi Arabia after years of discussions, and intensive negotiations over recent months.”
Boeing and Airbus (EADSY) reportedly vied for the Saudi deal.
BA Stock, GE Stock
Shares of Boeing dropped 4.1% to 199.17 on the stock market today, snapping three straight days of gains. BA stock remains below the 50-day moving average after a four-day slide last week.
Airbus stock tanked 5.3% Wednesday, undercutting the 50-day line. GE stock retreated 3.8% to 87.77. Shares continue to trade near a five-year high. Management gave an upbeat long-term aviation outlook at an investor event last week.
In mid-February, Boeing agreed to sell more than 200 aircraft to Air India in a $34 billion deal, seen as one of the largest in the airplane maker’s history.
A Saudi deal with Boeing comes amid signs of easing tension between the Biden administration and the Saudi government.
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