While the full investigation into the Air India crash will take quite some time yet to solve, one detail has emerged that proves to be good news for aerospace stock Boeing (BA). The precautionary inspections Air India staged on the fuel control switches for the 787 and 737 aircraft in its operations turned out just fine. But shareholders were oddly, if mildly, displeased about the whole matter. Shares were down fractionally in Tuesday afternoon’s trading.
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These inspections were not particularly related to the crash, though, perhaps, were on a tangential basis. After word emerged about the fuel control switches potentially being a problem, Air India began to check the switches on the appropriate aircraft that had them. As it turned out, none of the switches were an issue.
Air India’s checks on the switches were voluntary, reports note, but the aviation regulators in India soon made it mandatory. It actually followed a report from 2018, in which the Federal Aviation Administration (FAA) advised airlines to make similar checks. Though this was only done in an advisory capacity, as no action was specifically required. While a cockpit recording from the Air India flight that crashed suggested that the captain had cut fuel to the engines, the Aircraft Accident Investigation Bureau (AAIB) said it was too early to draw any conclusions from this.
Big New Government Orders Likely
Then came some better news for Boeing, as the United States Air Force will be pulling its plans to establish a “bridge tanker” between the KC-46 and the Next Generation Air Refueling System. Thus, plans to open up a competition for that new tanker have been canceled, and instead, the Air Force will be buying as many as 75 KC-46 aircraft from Boeing.
Several issues, including overall pricing and contract type, are still being worked out. But the idea of a competition to get that new tanker has been a thing for a little over a year now, reports note, and the sudden move to cancel it comes as a surprise to many observers. However, as far back as 2022, there were reports that said there could never be any competition to begin with, and Boeing would instead be the sole-source supplier going forward. Reports of “technical deficiencies” with the KC-46 are apparently being ironed out to this day, and the Air Force is happy with the progress.
Is Boeing a Good Stock to Buy Right Now?
Turning to Wall Street, analysts have a Strong Buy consensus rating on BA stock based on 17 Buys, two Holds and one Sell assigned in the past three months, as indicated by the graphic below. After a 22.97% rally in its share price over the past year, the average BA price target of $244.21 per share implies 6.84% upside potential.
