Ryanair will buy up to 300 Boeing 737 Max 10 aircraft worth more than $40 billion (€36.3bn) as it gears up to fly 300 million people a year from 2033.
The Irish airline giant on Tuesday confirmed reports it has ordered new jets from US manufacturer Boeing despite multiple delays on its existing orders. Ryanair has placed firm orders for 150 Max 10s – the largest model made by Boeing of that range – with options for 150 more, for delivery between 2027 and 2033.
The deal is valued at more than $40 billion at the jets’ listed price, although it is likely to have secured a large discount. The Irish carrier has previously won discounts from Boeing as it is the manufacturer’s biggest European customer although it will not say what they are worth.
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Given the deal’s size, shareholders will have to approve the contract at Ryanair’s annual general meeting in September, the airline confirmed.
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Assuming it takes all 300 Ryanair will grow its fleet from 540 aircraft now to 800 by the end of 2033, more than 500 of them Boeing 737 Max models, the newest commercial passenger jet produced by the US manufacturer.
The Max 10 can carry 228 passengers, one-fifth more than the 189 seats fitted in the Boeing 737 NGs, which still make up most of Ryanair’s aircraft. Ryanair expects that half the new deliveries will replace the 737 NG aircraft, cutting its fleet’s average age and fuel consumption.
The Irish carrier expects to grow passenger numbers from a predicted 185 million in its current financial year, which ends on March 31st, to 300 million in 2033, almost one third of all European short-haul traffic.
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Michael O’Leary, Ryanair chief executive, noted this was a record order. He predicted that the deal, coupled with remaining deliveries under Ryanair’s current Boeing Max order, would create “10,000 new jobs for highly-paid aviation professionals over the next decade” across Europe.
Mr O’Leary added that the airline would pass on savings from flying bigger more efficient planes to passengers in the form of lower air fares.
David Calhoun, Boeing president and chief executive, dubbed his company’s partnership with Ryanair “one of the most productive in commercial aviation history”.
Neil Sorahan, Ryanair’s chief financial officer, confirmed that the airline planned to pay for the aircraft from its own cash, but would be open to borrowing or possible leasing deals to finance the transaction if the “price is right”.
He noted that there would be a two-year gap between Ryanair receiving the last of the 210 Max 200 “gamechanger” jets, which Boeing is now delivering, in 2025, and the first of the Max 10s in 2027. He explained that the airline had no significant capital spending commitments during that time.
“So the working assumption is that we will do it from our own cash flows,” said Mr Sorahan. However, he added that the airline remained open to other funding opportunities, depending on their cost.
He said Ryanair did not fear that delays that have dogged delivery of its gamechanger aircraft could also hit the Max 10 orders. Those hold-ups have several times prompted Mr O’Leary to criticise Boeing publicly to industry analysts and other groups.
Mr Sorahan said Ryanair expected to have most of the aircraft due this year from Boeing in its fleet by July, even though the manufacturer warned problems with a supplier could hit its 2023 schedule.
