Boeing receives order for up to 300 planes from Ryanair

Ryanair, the European lowcost airline, said Tuesday that it had agreed to buy 150 737 Max 10 airplanes, its largest-ever Boeing order.

The deal includes an option that would allow the company to buy another 150 jets.

At list prices, 150 planes would sell for more than $20 billion, though Boeing and other manufacturers typically agree to deep discounts for such large orders. Ryanair plans to equip the plane, the largest Max model, with 228 seats, just shy of its maximum capacity. The jets are expected to replace older, smaller and less efficient Boeing planes and be delivered between 2027 and 2033. Negotiations had previously fallen apart over a disagreement on price, but Ryanair’s CEO, Michael O’leary, said that he was willing to pay more after taking into account the benefits of the new plane.

“If you look at the fuel performance of this aircraft, we’ll be carrying 21% more passengers but burning 20% less fuel,” he said in an interview Tuesday. “So we have a huge revenue upside, a huge cost upside.”

O’leary said that the most recent round of talks began with a

“If you look at the fuel performance of this aircraft, we’ll be carrying 21% more passengers but burning 20% less fuel. So we have a huge revenue upside, a huge cost upside.”

— Michael O’leary, Ryanair CEO

meeting in January between him and Boeing’s CEO, Dave Calhoun.

They agreed on “the outline terms of the deal in about an hour in Dublin,” O’leary said. “Once we both decided we want to get this done, it moved pretty quickly — much faster, I think, than our previous aircraft orders.”

By the time the planes are delivered, Ryanair expects to fly about 300 million passengers annually, more than double the number it flew before the pandemic. In the fiscal year that ended in March 2022, the airline flew 97 million passengers.

The airline serves more than 230 airports in 36 countries across or near Europe. It flies more than 500 aircraft. The new, larger planes will help to reinforce Ryanair’s most popular routes, O’leary said.

The Ryanair deal is the latest large order in recent months for Boeing, a major U. S. manufacturer. In February, Air India announced plans to buy 220 Boeing jets and 250 from Airbus. At the time, President Joe Biden said that the order would support more than 1 million American jobs.

In December, United Airlines said it would buy 100 Boeing 787 Dreamliners, large planes often used on longer international routes.

Boeing also announced in March that it had agreed to sell dozens of planes to a pair of airlines in Saudi Arabia, which has worked in recent years to become an aviation hub.

Boeing delivered 130 planes to customers in the first three months of this year, barely beating Airbus in quarterly deliveries for the first time in years. Still, Airbus reported more sales and has a bigger order backlog.

While high fares have discouraged some travelers, demand for tickets is expected to grow in the years ahead, giving airlines the confidence to add more planes and replace older, less fuelefficient models.

Airlines in North America reported their first profits last year since the pandemic began, and companies in Europe and the Middle East should resume making money this year, according to the International Air Transport Association. In Europe, demand is expected to grow nearly 9% this year. But demand is still expected to be about 11% lower than it was before the pandemic.

Two looming issues will affect the aviation recovery. The first is how quickly manufacturers can overcome supply chain problems, compounded by Russia’s invasion of Ukraine, which have hurt their ability to deliver planes as quickly as airlines want them. The second is whether a slowing global economy will put a damper on demand for air travel.

But travelers have been willing to pay more for tickets so far.

“We’re seeing very strong passenger demand at slightly higher airfares than we had expected through the summer of 2023,” O’leary said, crediting high employment and more Americans visiting Europe in part because of the strength of the dollar.

But that could change if consumers become more cautious or decide to spend more on other goods and services as they did during the pandemic.