Boeing is up again as travel rebound lifts aviation stocks

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Shares of

Boeing

and other aerospace-related businesses are flying higher, benefiting from an updraft of positive factors ranging from increased air traffic to increased repair activity.

On Thursday, Boeing stock (ticker: BA) closed up nearly $6, or 2.8%, at $218.11, below its 52-week closing high of 34 cents.

The stock is down more than 50% from its closing high of $440.62 on March 1, 2019, before the pandemic and before the second of two fatal crashes that led to the global grounding of the 737 jet. MAX. Still, shares are up more than 60% in the past 12 months.

The 52-week closing high is $218.45, seen on February 14.

The continued recovery of air travel is helping. The International Air Transport Association, or IATA, released global air traffic data for the month of April on June 1.

Domestic air travel was 3% above pre-Covid levels. “This recovery was driven by growth in various markets, particularly in the Asia-Pacific region,” read the IATA press release. Travel to China has increased by more than 500% compared to the previous year after the end of the closings intended to fight against the Covid-19.

The resumption of air transport means an increased need for aircraft and an increased demand for aerospace-related services. It also helps other parts of aerospace.

General Electric

(GE) The stock bull rose most of the day, just off its 52-week high hit on Wednesday, but closed flat. GE manufactures many engines on Boeing aircraft. In stock

FTAI Aviation

(FTAI), which repairs and services many Boeing aircraft engines, closed up 5.4%.

Deutsche Bank analyst Hillary Cacanando visited an FTAI facility in Montreal on Wednesday and wrote positively about the stock on Thursday. The tour “was very timely given the significant headwinds for the business,” the analyst wrote.

Along with the resumption of travel, these factors include supply chain constraints that are slowing deliveries of new jets, creating an opportunity for repair businesses. The learning curve associated with new engines such as GE’s LEAP and GE9x technologies provides another boost.

LEAP engines equip the 737 and

Airbus

(AIR. France) A320 jet families. The GE9x is the new engine for the Boeing 777x.

Reliability of new engines can take time, which means even more business for repair companies. It’s not new to the industry, but there are a lot of new engine technologies hitting the market these days. Cacanando notes buying FTAI stock and has a $32 price target for the stock.

Barclays

also raised its GE price target to $125 from $115 per share on Thursday, ahead of the Paris Air Show. The lounge, which starts in about a week, is a place many airlines do business with

Airbus

and Boeing.

Any data point is small, but together they seem to drive the industry forward. During part of Thursday’s trading, Boeing shares were the best performers of the

Dow Jones Industrial Average
and the third biggest winner of the

S&P500.

Write to Al Root at allen.root@dowjones.com