Boeing has secured a landmark order from Ryanair, one of its most significant customers, as the budget airline bets on the post-pandemic travel recovery. The carrier has agreed to purchase 300 of Boeing's largest 737 Max aircraft.
The order is valued at $40 billion, Boeing and Ryanair said in a statement on Tuesday, May 9, though customers typically receive significant discounts on such major deals.
The purchase highlights how carriers are willing to spend on fleet upgrades as air travel rebounds.
Boeing's 737 Max model is the foundation of Ryanair's complete short-haul aircraft fleet, making the airline the biggest purchaser of Boeing planes in Europe.
For Ryanair, this acquisition marks a noteworthy achievement as the company steadily acquires larger aircraft to bolster its capacity.
In the past, the airline has augmented its order for the 737 Max 8 variant, outfitted with a distinctive high-density layout, to a grand total of 210 planes. Currently, the carrier has taken possession of approximately 100 of these airliners and has intentions to integrate an additional 300 Max airplanes into its fleet.
Ryanair CEO Michael O'Leary has cited growth in Italy, Portugal, Ireland, and Spain as providing ample opportunities for growth, particularly on shorter-haul routes to sunny destinations.
Several budget airlines are anticipating an increase in summer bookings, especially for shorter-haul flights to popular sunny destinations such as Spain and Italy. One of these airlines is British Airways, whose parent company, IAG SA, recently revised its yearly forecast in response to this trend.
The 737 Max 10 has not been without its challenges, with Boeing experiencing several setbacks.
Its release has been considerably delayed, and Boeing now anticipates that the US Federal Aviation Administration will commence certification flights for the aircraft in 2023, with initial deliveries expected in 2024.
Moreover, in December, US legislators reached an agreement to waive a new cockpit mandate that was set to go into effect in early 2023, which would have affected the still unapproved Max 7 and 10 variants and potentially caused additional delays.
However, airlines that have committed to the 737 Max 10 include Delta Air Lines, United Airlines Holdings, and IAG. The aircraft competes with Airbus's bestselling A321neo as carriers move increasingly to the biggest versions of the most widely flown narrow-body jets.
With this purchase, Ryanair has expanded its fleet as it seeks to grow traffic to 225 million passengers over the next four years.
The company's higher capacity 737 Max 8, known as the 8200, has already allowed it to claim a cost advantage over other European carriers, and the even-larger Max 10 provides another weapon in its arsenal.
