Low-cost giant Ryanair announced a substantial new order with Boeing for up to 300 737 MAX 10 aircraft today worth $40 billion, of which 150 are firm orders. Negotiations for the order have been ongoing since before the COVID-19 pandemic began but were pulled in September 2021 as Ryanair and Boeing couldn't find a mutually agreeable pricing point. In March, the airline's Group CEO Micheal O'Leary told Simple Flying that Ryanair had finally accepted that it would indeed need to pay more for these aircraft.

Move Boeing 737 MAXs coming

Today's Ryanair Boeing 737 MAX order boosts the total number of MAXs ordered by the Irish LCC to 360. Per Boeing's order books, the carrier placed 100 firm orders in November 2014, then added 10 in June 2017, 25 in March 2018, and 75 in December 2020. This latest tranche of orders is subject to shareholder approval at Ryanair’s 14 September AGM.

Commenting on the latest announcement, Michael O'Leary, Group CEO of Ryanair, said,

“Ryanair is pleased to sign this record aircraft order for up to 300 MAX-10s with our aircraft partner Boeing... In addition to delivering significant revenue and traffic growth across Europe, we expect these new, larger, more efficient, greener, aircraft to drive further unit cost savings, which will be passed on to passengers in lower air fares. The extra seats, lower fuel burn and more competitive aircraft pricing supported by our strong balance sheet, will widen the cost gap between Ryanair and competitor EU airlines for many years to come, making the Boeing MAX-10 the ideal growth aircraft order for Ryanair, our passengers, our people and our shareholders.”

Boeing 737-8200 or Boeing 737 MAX 10

As the MAX goes, Ryanair is currently only flying the MAX 8200, a modified version of the 737 MAX 8 fitted with an additional set of emergency exits to boost the number of seats to 197. On the face of it, the Boeing 737 MAX 10 is a boon for the airline, as it allows Ryanair to carry even more passengers on its most in-demand routes, though Michael O'Leary rather sees it as a fine line that must be walked. Speaking to Simple Flying about a possible new order in March, he revealed,

"We're discussing both a possibility of an order for 8200s which is what we're flying with 197 seats, or the MAX 10s. The issue we have with the MAX 10 is obviously the 30 extra seats. If you want us to buy an aircraft with 30 extra seats that we have to fill six times a day, that's a lot of yield dilution. Therefore we need a much more competitive seat price if you want the extra 30 seats."

The other consideration is the crew requirements of such an aircraft. EASA, the European aviation regulator, mandates that one cabin crew member is required for every 50 seats or part thereof installed on an aircraft. If you have 230 seats but one passenger, you still need five cabin crew members on the flight, compared to the four currently required on the airlines' existing fleet. This increases the cabin crew cost of each flight by 25%, meaning that the more competitive seat price mentioned by O'Leary will need to come from elsewhere.

About Ryanair's Boeing 737 MAX 10s

Ryanair revealed that its Boeing 737 MAX 10 aircraft will contain 228 seats each (21% more than its Boeing 737-800s). The Irish low-cost carrier will take delivery of these new, larger aircraft between 2027 and 2033. Around half of the order is planned to increase the size of the airline's fleet, with the other half earmarked to replace older Boeing 737-800s.

More aircraft and more seats mean more capacity, something which the carrier is keen to make use of. During its last financial year, the Irish LCC carried 168 million passengers (a new record). By 2034, the airline hopes to boost this figure by a whopping 80% to 300 million guests.

Will they, won't they?

As mentioned above, there has been much back and forth about today's order, with the deal first touted before the COVID-19 pandemic began. Talks broke down with O'Leary publicly walking away in September 2021 over what he called "egregious pricing by Boeing." Talks between the two parties only resumed earlier this year, and in late March, O'Leary told Simple Flying that he expected news of today's order to come "maybe by the end of 2023, early 2024".

While Ryanair thought that Boeing was pricing the aircraft too high, it has since accepted that perhaps they were trying to drive too hard of a bargain. During the same interview, O'Leary told Simple Flying,

"The talks broke down about 18 months ago over what we thought was egregious pricing by Boeing. We have accepted that whatever new aircraft we do want, we will have to pay a little be more than the last order. The last order was priced during the MAX grounding, so we got an exceptional deal."

A huge Boeing 737 customer

Ryanair is a huge Boeing 737 customer, with almost all of its fleet consisting of the American planemaker's narrowbody. The airline has considerable ambitions to continue growing over the coming years but needs more capacity and, thus, more aircraft to achieve this. The airline is already on track to set a new passenger record in 2022 but finds its wings clipped by slower-than-anticipated deliveries from Boeing.

On this point, O'Leary previously told Simple Flying,

"We were due to take 51 aircraft from Boeing by the end of April this year. We will get 49 aircraft by the end of June, and the 50th and 51st in the first two weeks of July. It has eaten into our traffic this summer, and what would otherwise have been our planned growth."

In April, Ryanair carried 16 million passengers, a 12.36% increase year-on-year, and just 0.9 million short of its previous monthly record of 16.9 million, set in August 2022. While the new aircraft will allow Ryanair to offer additional capacity across its route, it will also enable the carrier to retire some of its older, less efficient 737-800s.

While this is a boon from an environmental point of view, the Boeing 737 MAX also allows Ryanair to use less fuel, thus cutting the cost of each flight. While a decent chunk must be invested in the new aircraft, it will eventually pay for itself.

What do you make of today's Ryanair order? Let us know what you think and why in the comments below!

• 

  Ryanair

  IATA/ICAO Code:

  FR/RYR

  Airline Type:

  Low-Cost Carrier

  Hub(s):

  Dublin Airport, London Stansted Airport, Milan Bergamo Airport

  Year Founded:

  1985

  Airline Group:

  Ryanair Group

  CEO:

  Eddie Wilson

  Country:

  Ireland

• 

  Boeing

  Stock Code:

  BA

  Date Founded:

  1916-07-15

  CEO:

  Dave Calhoun

  Headquarters Location:

  Chicago, USA

  Key Product Lines:

  Boeing 737, Boeing 747, Boeing 757, Boeing 767, Boeing 777, Boeing 787

  Business Type:

  Planemaker