As the aviation industry’s big Paris Air Show continued this week, officials with United Technologies Corp. and Raytheon Co. continued to promote the wisdom of their proposed merger and Boeing got a solid win.
“Look, I know it caught everybody by surprise,” Greg Hayes, UTC’s chief executive officer, told analysts during a presentation at the industry gathering that began Monday. “But at the end of the day as you step back and you think, what was the next logical step for the UTC aerospace business, it was exactly this.”
The merger — which would create an aerospace and defense technology giant, Raytheon Technologies Corp., valued at $100 billion — was announced last week. UTC is the parent of Cedar Rapids’ largest employer, Collins Aerospace.
Thomas Kennedy, CEO of the Waltham, Mass.-based Raytheon, said at the air show the deal will capitalize on rising military spending.
“I can tell you there is strong support for defense moving forward,” he said.
The deal is anticipated to be finalized in mid-2020.
Boeing on Tuesday announced its first deal for 737 MAX 8 jets since a March grounding that followed two deadly crashes, landing a $24 billion agreement with British Airways owner International Consolidated Airlines Group — better known as IAG.
The airline group signed a letter of intent for 200 of the single-aisle planes, Boeing said in a statement Tuesday. IAG, led by a former 737 pilot, would take delivery of the planes between 2023 and 2027, assuming the deal is formalized.
The deal hands Boeing a much-needed lifeline as it struggles to get the MAX back in the air amid a grounding that recently entered its fourth month.
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The crashes in October and March were caused when a software system received erroneous readings from a sensor, repeatedly forcing the nose of the planes down until pilots lost control.
“I wouldn’t ask anybody to do something I wouldn’t do myself,” IAG Chief Executive Officer Willie Walsh, who flew 737 jets for about 18 years, told reporters at the air show.
“If you ask me, I would get on board a Max tomorrow.”
With the Max deal, Boeing has upended what looked to be a cake walk for rival Airbus at this year’s Paris trade fair.
As of Tuesday afternoon in Paris, Boeing had pulled ahead of its European rival with a total of $31.8 billion over two days, with Airbus about $150 million behind.
The amounts are based on list prices, before customary discounts.
Walsh said he flew the MAX in a simulator, including a version with a software update Boeing is preparing for the Maneuvering Characteristics Augmentation System, which was implicated in the crashes.
“It was very helpful to see it in operation and understand the changes Boeing were proposing,” Walsh said. “It gave me confidence.”
Bloomberg News and the Hartford Courant contributed to this report.