Ryanair has huge plans for its latest airline acquisition, Laudamotion, expecting to order at least 100 Airbus A321 aircraft for the company. Its initial plans for Laudamotion were to expand the fleet and grow its business. The potential airline order will benefit Laudamotion’s expansion efforts and position Ryanair competitively in the overall market.
Growing Laudamotion’s Airbus Fleet
Ryanair CEO, Michael O’Leary, attended the A4E conference in Brussels where he spoke about the upcoming plans for Laudamotion. Ordering 100 Airbus A321 is on the horizon, but it’s still in the early stages of talks and negotiations for the aircraft.
Leary states, “I would not see any point in having an order if it is less than 100 aircraft – 50 firm and 50 options.” At the current market price, the order could be worth over $6.5 Billion. Details about the expected order may come as a surprise for most.
Ryanair is known for being an all-Boeing fleet. In fact, at the same conference, Ryanair showed interest in adding new Boeing 737 MAX 10 to its main fleet. So why consider the Airbus A321 for a Ryanair subsidiary?
Utilizing Airbus for the Laudamotion fleet is a move to diversify the overall fleet holdings of Ryanair. An airplane fleet mix will protect Ryanair in the future if any issues arise from either company. Leary mentions, “We are committed to being an Airbus customer through Laudamotion because in the future, as there are competition divestments or other M&A opportunities in Europe, some will be on the Airbus side, and some will be on the Boeing side, and we want to be able to do both.”
The forward-thinking of Ryanair will make them more competitive in the global market. Expanding their manufacturing relationships with Boeing and now Airbus will give them more options while operating.
Laudamotion is an Austrian airline based in Vienna and is one of the newest airlines to enter the market. The company completed its first fiscal year of operations in March 2018. At this time, Ryanair made its first investment into the young airline, acquiring 75%. In January 2019, Ryanair bought the remaining shares to become the sole owner of the airline.
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For their growth, Ryanair always considered Airbus for the Laudamotion fleet. It currently operates a fleet of 19 aircraft. It wants to increase the fleet to at least 25 by Summer 2019 with 20 new routes added by Winter 2019. Laudamotion is currently in planning and discussions with several airports around Europe to support the new fleet, potentially creating a new hub for the region.
In its first year of operation, Laudamotion carried four million passengers. Ryanair proposes that it plans to almost double the number of passengers in two years, by 2021. The order of at least 100 aircraft will surely sustain the growth plans for the airline.
Ryanair has been one of Boeing best customers, but the future billion-dollar investment in Airbus could soon shift their spending with the US competitor. Ryanair still plans to maintain an all-Boeing fleet, but it will trial Airbus for its subsidiary.
Do you think Ryanair will add Airbus to its main fleet or stick with Boeing?