Ryanair (LON: RYA) Buys Another 75 Boeing Max Jets

Summary

• Ryanair has ordered another 75 Boeing 737 Max aircrafts worth $9 billion
• The company expects to receive the first delivery of its jet in spring next year and the final one by the end of 2024
• The budget airline could also agree to another big order of 737 Max in the next 18 months

Irish low-cost airline Ryanair Holdings Plc (LON: RYA), which is Europe's biggest budget airline,  has ordered an additional 75 Boeing 737 Max aircrafts worth up to $9 billion, brushing away the cynicism over the aviation industry and the coronavirus pandemic.

The development is seen as a big boost to Chicago-based Boeing just before its key jet is set to return to flying, which was grounded in 2019 after it had two deadly crashes due to its automated systems that killed 346 people on board.

Ryanair, which is Europe’s biggest budgeted carrier, has ordered about 210 planes from Boeing at the price of £94m per aircraft. Michael O’Leary, the chief executive officer of Ryanair, said the latest deal is going to be a gamechanger for the airline’s business model.

O’Leary added that the company got a reasonable discount on the fleet and the compensation for the postponement in supplying the original order of the 737 Max.

O’Leary said he expects to receive the first delivery of its jet in spring of 2021 and the final one by the end of 2024. The firm could also agree to another big order of 737 Max in the next 18 months and hopes to be flying the 230-seat Max 10 by 2025.

Commenting on the deal, Boeing CEO David Calhoun said he is sure that the Ryanair move is the start of the company’s bid to rebuild its Max order book.

However, he rejected the notion that Boeing is under pressure due to the coronavirus pandemic, which is causing financial hardships to the company along with its exasperated past. The planemaker is not going to slash the prices of its planes, Calhoun said, adding that the firm is rather looking to resell aircraft covered in the earlier deals that were later withdrawn.

Also read: Will Ryanair’s (LON: RYA) demand revive on the back of Pfizer’s Covid-19 vaccine promises?

Last month, Boeing received approval from the Federal Aviation Administration for its Max jets to carry passengers once again. Now, the US planemaker is waiting for clearance from other aviation authorities in Europe and other countries.

Like most airlines across the world, Ryanair has seen financial hardships due to the pandemic that compelled the low-cost airline to park many of its planes. In fact, the airline had grounded 99 per cent of its planes during the first three months of the coronavirus spread in Europe.

The shares of Ryanair in the morning trades on 4 December 2020, was trading at EUR 16.27, down by 0.49 per cent 08:28 AM GMT+1.