The News
Ryanair, the European low-cost airline, said on 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. The jets are expected to replace older, smaller and less-efficient Boeing planes and be delivered between 2027 and 2033.
“The extra seats, lower fuel burn and more competitive aircraft pricing supported by our strong balance sheet, will widen the cost gap between Ryanair and competitor E.U. airlines for many years to come, making the Boeing MAX 10 the ideal growth aircraft order for Ryanair, our passengers, our people and our shareholders,” Michael O’Leary, the airline’s chief executive, said in a statement.
Ryanair expects to fly 225 million passengers in its 2026 fiscal year, up from 149 million passengers a year 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 Europe. It flies more than 500 aircraft.
Why It Matters: Boeing’s business is rebounding.
The Ryanair deal is the latest large order in recent months for Boeing, a major American manufacturer.
In February, Air India announced plans to buy 220 Boeing jets and slightly more from Airbus. At the time, President Biden said that the order would support more than one million American jobs.
In December, United Airlines said it would buy 100 Boeing 787 Dreamliners, large, twin-aisle 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.
Background: Air travel is coming back.
High fares have discouraged some travelers, but demand for tickets is expected to grow in the years ahead, giving airlines the confidence to add more planes and replace older, less fuel-efficient 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 percent this year. But demand is still expected to be about 11 percent lower than it was before the pandemic.
What’s Next: Will the upswing continue?
Two looming issues will affect the aviation recovery: How quickly manufacturers can overcome supply chain problems compounded by Russia’s invasion of Ukraine that have hurt their ability to deliver planes as quickly as airlines want them. And whether a slowing global economy will put a damper on demand for air travel.
Americans have been willing to pay more for tickets so far. 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
