Budget airline Ryanair has ordered 75 additional Boeing 737 Max jets with a list price of $9billion (£6.6billion), throwing a commercial lifeline to the embattled U.S. planemaker after regulators lifted a 20-month safety ban.
The order from the Irish airline, Europe’s biggest low-cost carrier and one of Boeing’s most important customers, is the largest for the jet since 2018 before two fatal crashes led to its grounding. Boeing shares were up 5.2 per cent on the news.
‘This is the beginning of the fulfilment of a more robust order book,’ Boeing Chief Executive David Calhoun said at a signing event in Washington DC. ‘I’ve always had faith that the order book would begin to fill with the return of the industry.’
Budget airline Ryanair has ordered 75 additional Boeing 737 Max jets with a list price of $9billion (£6.6billion). This picture shows the contracts being signed. Left to right: Stan Deal, Boeing Commercial Airplanes president and CEO, Dave Calhoun, Boeing president and chief executive officer, Michael O’Leary, Ryanair Group CEO, and Stan McCarthy, Ryanair Chairman
‘The Boeing Max is a fabulous aircraft,’ Ryanair Chief Executive Michael O’Leary said
‘The Boeing Max is a fabulous aircraft,’ Ryanair Chief Executive Michael O’Leary said.
Ryanair did not disclose the price it will pay, but traders say deals typically include discounts in excess of 50 per cent of list prices.
Ryanair was expected to win an even bigger discount of well over two-thirds in return for a headline-grabbing relaunch of the Max that helps fill gaps left by cancellations, sources said.
Part of the discount was compensation for the 18-month delay to the first delivery of the Max, O’Leary said. He did not say whether a cash sum had also been paid.
The wreckage of the Ethiopian Airlines Boeing 737 Max 8 that crashed on March 10, 2019
The order could be a pivotal moment in efforts by Boeing to rehabilitate the Max, its fastest-selling model before it was grounded in March 2019 following crashes in Indonesia and Ethiopia in which 346 people died.
Reuters reported on Wednesday that Ryanair was close to placing an order for up to 75 Boeing jets.
As regulators move to clear the aircraft for flight after revisions to cockpit software and pilot training, executives are hoping for several eye-catching Max deals that will help put the crisis behind it, sources have said.
The jet staged its first post-grounding flight with media on board on Wednesday, weeks before the first commercial passenger flight on December 29.
Boeing is also negotiating with airlines including Southwest and Delta and Alaska Airlines, which last month agreed to lease 13 Boeing Max jets, industry sources have said.
Ryanair has a record of striking deals to lock-in low costs when its bargaining power is highest, most famously by placing an order for 100 new 737s at rock-bottom prices in the wake of the September 11, 2001 attacks on the United States.
That deal laid the foundation for its transformation into one of Europe’s dominant airlines.
On Thursday Ryanair said it would pass on any lower aircraft costs in lower fares.