In a significant aviation development, Ryanair of Ireland has inked a massive agreement with Boeing, putting an end to an 18-month public disagreement over pricing that had cast a shadow on one of the aviation industry’s closest alliances.
Ryanair’s Firm Order for 150 Boeing 737 MAX 10 Jets with 150 Options
Europe’s premier low-cost carrier has confirmed a firm order for 150 of Boeing’s 737 MAX 10, the largest member of Boeing’s narrow-body jet family, with an additional 150 options. This monumental deal signifies a revival of the strong partnership between the two aviation giants.
Challenges Over Pricing
Ryanair‘s CEO, Michael O’Leary, flew to Washington to finalize the agreement while playfully acknowledging the past pricing disputes with Boeing. He emphasized that from Ryanair’s perspective, it would never be cheap enough, whereas Boeing held the opposite view. However, this deal is a testament to their commitment to sustaining high-tech jobs in the aviation sector.
Boeing’s Perspective
Dave Calhoun, Boeing’s CEO, reciprocated with humor, indicating that no premium would ever suffice for Boeing’s best-selling jet, adding a touch of camaraderie to months of intense negotiations.
Boosting Ryanair’s Ambitions
This deal holds the promise of elevating Ryanair’s annual passenger capacity to an impressive 300 million passengers by March 2034, a considerable increase from the 168 million passengers it flew until the end of March this year. By 2026, Ryanair projects to carry 225 million passengers annually.
A Boost for Boeing’s Troubled 737 MAX Series
This agreement brings relief to Boeing’s 737 MAX series, which has been grappling with delivery challenges due to a two-year safety crisis and post-COVID disruptions. Notably, Ryanair has consistently expressed interest in the 230-seat MAX 10 variant, which is yet to receive certification.
Resolving Past Delays
The deal also signifies Ryanair’s acknowledgment of Boeing’s efforts to mitigate past delays. Last year, negotiations had broken down over pricing and delays in the delivery of previously ordered aircraft. However, it appears that Boeing has made significant progress in this regard.
Significant Value and Early Slots
The deal is valued at $40 billion according to list prices, though experts suggest that this figure includes options and that typical discounts for firm orders exceed 50%. The Boeing 737 MAX 10, for instance, has a list price of $135 million. Industry insiders note that, despite the relief for Boeing, Ryanair has sacrificed some advantages in negotiations, including securing early delivery slots, as carriers like United Airlines have also placed substantial orders for the MAX 10.
The Road Ahead
This significant order secures Ryanair’s position as a dedicated user of Boeing 737s, considering that Airbus is fully committed for years to come, and Chinese suppliers are yet to be competitive in the Western market.
This deal signifies a fresh start for Ryanair and Boeing, ensuring the continued growth of Europe’s leading low-cost carrier while bolstering Boeing’s position in the aviation industry.
