Ryanair Secures Compensation For Boeing 737 MAX Groundings

Ryanair has allegedly been compensated by Boeing in lieu of the grounding of the 737 MAX, of which the airline as 135 on order. The agreement is thought to involve the waiving of money already owed to Boeing by Ryanair.

Ryanair airliner in flight
Ryanair has edged for compensation since the MAX grounding on March 13th. Photo: Ryanair

Ch-Aviation reports that the Irish airline received ‘millions of euro’ following a round of talks with Boeing. The airline had previously hinted at its demand to be compensated for delays of the delivery of the MAX aircraft. It had hoped to begin using the type in April of this year.

Delivery delays

Ryanair boss Michael O’Leary has already part-attributed the slump in early-year profits to the 737 MAX’s grounding. The carrier expects a similar downturn later this year too due to Brexit uncertainties and stiff competition.

The airline was forced to delay delivery of the first of its 153 aircraft last month, following the worldwide grounding of the type in March. The grounding followed two accidents suspected to be caused by faulty anti-stall computer software. The delays are thought to have cost Ryanair one million summer passengers: a profit loss of estimated at $8m.

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Ryanair said earlier this month that the delayed deliveries of the MAX had led the airline to ‘not see any meaningful cost benefit until 2021‘. As a result the airline froze pre-delivery payments of the $22bn order with Boeing.

Deal struck

Neither Ryanair nor Boeing were prepared to comment about the nature of the agreement. However, O’Leary admitted earlier this week to be in talks with Boeing about possible compensation to make up for a loss of revenue.

Ryanair was due to receive its first Max in April and take five more during the 2019 summer season.

3 Ryanair airlines on apron of airport
The agreement is likely to include a discount of the money owed by Ryanair to Boeing. Photo: Ryanair

O’Leary has not been reticent about his intention to urge Boeing to cover lost profit. John Mulligan writing for Independent.ie quoted O’Leary as saying last week:

I’m sure we will work something out with Boeing. Whether that’s compensation or something on the price of the aircraft – not sure yet.’

According to Mulligan the deal is likely to have included a hefty discount off of the $22bn MAX order value. Simple Flying have reached out to the airline for further comment, but have so far received no reply.

Flood gates

Ryanair is one of Boeing’s biggest customers and the world’s largest operator of 737-800s. Five years ago the airline ordered 135 737 MAX 200s with an option for 75 more. The first batch of aircraft – all with a high-density seat configuration – was slated for delivery in the summer of this year.

Ryanair airliner on apron in rain
Other companies may vie for compensation in the wake of Ryanair’s success. Photo: Ryanair

The agreement reached is certain to set a precedent for other airlines to approach Boeing with similar demands for compensation. Norwegian and AeroMéxico have both hinted at their intention to squeeze the troubled manufacturer for some form of compensation.

Meanwhile, Ryanair’s Michael O’Leary continues to have ‘utmost confidence’ in Boeing’s 737 MAX despite his postponing the delivery of the first five on order.

Depending on the outcome of the re-certification of the type by the EASA, O’Leary expects to have his MAXs flying by winter. He also expects to have 50 of the jets in service in time for summer 2020, according to The Times.

4 comments
  1. Because they’ve converted their options, ordered more and added more options to their order book is why. Let the MAX re-launch commence in earnest. Keep your eyes peeled on Paris and (what I expect!) will be many announcements surrounding the MAX coming out of Le Bourget.

  2. “The agreement is thought to involve the waiving of money already owed to Boeing by Ryanair.”
    This statement suggest that the waived amount is either the installment payment for the existing 135 aircraft order or the down payment for the additional options. Either case, the amount would not be small, with the latter being a relatively large amount.

  3. Why doesn’t RyanAir switch orders to get another Boeing Aircraft instead of the 737 Max series since it is loyal to Boeing?
    I will stop flying with RyanAir in Europe whether the Boeing Max series get approved or not and will use Easyjet which only has Airbus aircrafts then.
    I don’t think i ll be the only passenger to do that.

  4. The safest thing is to just avoid the 737 Max. We are on our own for safety now.

    I usually fly Delta. They don’t have any 737 Max aircraft. Google “Southwest Airlines is going to allow people who don’t want to fly on the Boeing 737 Max to switch planes for free”. United as well so far. Hopefully all other airlines allow passengers to avoid the 737 Max for free as well.

    If passengers refuse to board the 737 Max it will go away. Chopped up for scrap. Unable to kill any more customers.

    Both Boeing and the FAA said the plane was safe originally and also safe after almost every other country had grounded it after two crashes. Why would anyone believe anything they have to say about safety now?

    They used to be the safest in the world. Now it’s all about profits so we are on our own for safety.

    The original plan at Boeing was to create a proper, clean sheet new design to replace the 737. It’s not designed for modern engines at all which is where the problem started. Boeing planned to finally kill this dinosaur from the 60s. Instead upper management and sales killed this idea as well as 346 passengers.

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