Ryanair may buy even more Boeing 737 Max planes ‘if price is right’

Ryanair could follow news that it will buy 75 extra Boeing 737 Max jets with a further order from the US aircraft manufacturer.

The Irish airline group confirmed on Thursday that it will buy 75 more 737 Max planes from Boeing, bringing its total order for the aircraft to 210, worth a total of $22 billion (€18.1 billion).

Michael O'Leary, Ryanair Holdings chief executive, told a press conference that the company was "in further dialogue on the Max 10" with Boeing. He indicated that a fresh aircraft order could follow Thursday's announcement.

Ryanair's chief financial officer Neil Sorahan said the group liked the Max 10, the newest version of the Boeing jet.

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“We would like to be a purchaser of the Max 10 at the right price and if the timing is right,” he said.

Mr Sorahan, who attended the announcement in Washington, DC with Mr O'Leary, Ryanair chairman Stan McCarthy and Boeing chief executive Dave Calhoun, cautioned that it could be next year or beyond before the group confirmed an order for the Max 10.

Meanwhile, he said that the Irish company was pushing Boeing to deliver the first 25 to 30 of the Max 8200s that it has ordered on time for next summer, when Ryanair hopes air travel will begin recovering from the impact of Covid-19.

Safety

Confirmation that Ryanair would take 75 extra 737 Max 8200s came a day after the first commercial passengers flew on the craft since American Airlines restored it to service.

Ryanair’s confirmation of its plans to buy the aircraft is the first firm order for the Max following a 20-month grounding by air travel safety regulators prompted by two crashes, in Eithiopia and Indonesia, that killed 346 people.

Mr O’Leary described the Max as the most scrutinised and audited plane in aviation history. “Forty-six million people have already flown in the Max aircraft,” he added.

The Max had been in service for several months before its grounding. EU, US, Canadian and other regulators have been working with Boeing on restoring the plane’s airworthiness since the March 2019.

Ryanair is already committed to buying 135 of the Max 8200. Thursday’s announcement confirmed that it would take up a long-standing option for a further 75.

“This will drive our fleet to 600 over the next five years,” Mr O’Leary told the press conference.

Recovery

Mr Sorahan said that Ryanair believed passenger numbers would recover to 2019 levels, when they hit 149 million, in two to three years. The company aims to carry 200 million passengers in its financial year ending March 31st, 2026.

Mr O’Leary said Ryanair would pass the lower costs of flying the Max on as lower fares. The craft that Ryanair is buying will carry 200 people, eight more than the planes it now flies, while burning 16 per cent less fuel.

The airline said that the deal included a modest discount to compensate the low-cost giant for delays in the delivery of the Max that resulted from its grounding.

Neither side revealed the size of the discounts, but at the launch Mr O’Leary described them as “too modest”. Most analysts believe they will have been significant.

Ryanair confirmed last month that Boeing had already repaid it €250 million last year to compensate it for delays in the delivery of the Max, a result of the jet’s grounding.

The Irish airline had aimed to get the first of its Max aircraft on time for summer 2019, meaning that next year’s delivery will be two years late.

Mr Sorahan said Boeing would step up its delivery rate from 2021, with a further 80 arriving next winter.

Boeing chief Mr Calhoun said the US aerospace giant would focus on safely delivering the backlog to Ryanair and other customers.

“We firmly believe in this airplane and we will continue the work to re-earn the trust of all of our customers,” he added.