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UPS Orders Fleet of 19 Boeing 767 Freighters, BA Stock Surges 5.86%

UTC by Bhushan Akolkar · 2 min read
UPS Orders Fleet of 19 Boeing 767 Freighters, BA Stock Surges 5.86%
Photo: Depositphotos

BA stock picked up strong momentum during the first quarter of 2021 gaining 35% by March. However, it has been constantly moving sideways since then.

As the e-commerce industry continues to grow rapidly, United Parcel Service (UPS) takes the next move to meet the market demand. On Tuesday, December 21, the package delivery giant UPS placed an order of 19 Boeing 767 Freighters.

Commenting on this development, Boeing said that the surge in e-commerce has raised the demand for air cargo. With this deal, 2021 will be a “record-breaking year” for Boeing in terms of freighter sales. The US planemakers also added that it has received 80 firm orders for new widebody freighters. Besides, it also has more than 80 orders for Boeing Converted Freighters.

With the travel industry going to a standstill with the pandemic, plane makers have been facing a strong business crunch. However, with the boom in online shopping, the freighter market has proved to be a rare bright spot for them.

Post the recent announcement, Boeing Co (NYSE: BA) stock has gained 5.86% on Tuesday. BA stock ended the trading at $199.52 levels yesterday. It has been a year full of volatility for Boeing investors. BA stock picked up strong momentum during the first quarter of 2021 gaining 35% by March. However, it has been constantly moving sideways since then. The BA stock is currently trading at NIL returns year-to-date. 

UPS Benefits from the Pandemic

As said, with shutdowns happening all over, shoppers turned to online shopping over the last year. This has helped the package delivery giants who have seen their businesses growing faster. UPS is among the key beneficiaries of the pandemic shift to online shopping.

UPS further expects the trend to continue in the coming year. UPS’s US. Operations President Nando Cesarone said that they will take the delivery of the aircraft anytime between 2023 and 2025.

Ever since Being entered the Freighter’s business in 1995, UPS has ordered a total of 91 aircraft. Boeing said that these new jets will allow UPS to meet the expected near-term and long-term cargo demand. Boeing currently controls a staggering 90% of the freighter market. It also forecasts an annual increase of 4% in the air cargo demand over the next 20 years.

While Boeing Freighter’s business is picking up, the company is also witnessing some demand in the travel space. Besides, it has managed to overcome the issues with Boeing 737 Max with the Chinese authorities being the latest to clear it.

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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