As travel demand rebounds in China, the country’s airlines are gradually getting their Boeing (NYSE:BA) 737 Max planes back in the sky. According to Wells Fargo Securities analysts, the airlines’ immediate focus will likely be on recommissioning their current fleets rather than accepting new aircraft deliveries from Boeing.
In fact, recent data show a significant uptick in service restoration – as of mid-May, 58% of China’s Max fleet has returned to service, a big leap from the 22% reported in March. The estimated daily Max flights have also tripled over the past two months, currently hovering around 180-185, which includes test flights.
However, the current number of flights is still only about half of what could be possible at full capacity for the narrowbody aircraft. While Boeing has a multitude of 737 Max planes ready for delivery to Chinese airlines, geopolitical tensions between China and the U.S. have created roadblocks.
Overall, Wall Street analysts have a consensus price target of $238.40 on BA stock, implying 16.25% upside potential, as indicated by the graphic above.