Ryanair, a leading low-cost airline, has confirmed the purchase of 150 Boeing 737-10 aircraft, with an option to buy 150 more, marking it as the most significant order from an Irish business for American products.
At catalog prices, the deal stands at a value of $40 billion, as disclosed by Ryanair in a Tuesday statement. Notably, the announcement lacked any of the former chastising remarks CEO Michael O’Leary has made against Boeing due to previous aircraft delivery delays.
Following the news, Boeing's stock price rose over 3%, and Ryanair's shares also appreciated by 2%.
The aircraft, which are the largest models in Boeing’s 737 Max series, are slated for delivery from 2027 through 2033. Ryanair, Europe's top budget airline, believes this acquisition will facilitate an increase in passenger numbers from 168 million as of March 2023 to 300 million by March 2034.
Ryanair is optimistic that this fresh order will promote consistent growth in traffic and tourism at more affordable rates (and lower emissions per flight) across all European countries. The airline is well-positioned to spearhead the post-pandemic recovery in traffic, tourism, and employment.
Despite the turbulence caused by the pandemic, Ryanair has rebounded more swiftly than most of the aviation industry, growing its market share as several rivals either went bankrupt or reduced their fleets and passenger capacities.
Ryanair registered a record profit for the last quarter of 2022, as a result of a 14% increase in airfares compared to pre-pandemic levels. The airline's full-year earnings report is expected to be released on May 22.
On Tuesday, O’Leary expressed satisfaction with the airline's record-setting aircraft order, calling attention to the "larger, more efficient, greener aircraft."
Despite previous disagreements with Boeing over pricing and delivery delays, O’Leary acknowledged that Boeing has made considerable strides in rectifying past issues. However, he maintained that the aircraft could always be less expensive from Ryanair's perspective.
Boeing CEO Dave Calhoun also lauded the transaction, noting that this landmark deal will further bolster the longstanding partnership between the two companies.
Ryanair's shareholders will need to approve the transaction at the airline's annual meeting in September. Ryanair is one of Boeing's most prominent customers, with over 600 aircraft either in its fleet or on order.
The agreement provides a much-needed boost for Boeing, which has been grappling with the aftermath of two fatal crashes involving the 737 Max model. Apart from one quarter, Boeing has been unprofitable since the 737 Max grounding in March 2019, which lasted for 20 months.
Q&A Section:
Q: How many Boeing 737-10 aircraft has Ryanair agreed to purchase?
A: Ryanair has agreed to purchase 150 new Boeing 737-10 aircraft, with an option to buy 150 more.
Q: What is the estimated value of the deal between Ryanair and Boeing?
A: The deal is estimated to be worth around $40 billion at list prices.
Q: When is Ryanair expected to receive the Boeing 737-10 aircraft?
A: The Boeing 737-10 aircraft are expected to be delivered to Ryanair between the years 2027 and 2033.
Q: What is the expected impact of this deal on Ryanair's passenger numbers?
A: Ryanair anticipates that this deal will help increase their passenger numbers from 168 million as of March 2023 to approximately 300 million by March 2034.
Q: How has Ryanair's market performance been in the wake of the pandemic?
A: Ryanair has managed to recover more rapidly than much of the aviation industry from the pandemic's impact, increasing its market share as several competitors either went bankrupt or reduced their fleets and passenger capacity.
Q: What was Ryanair's financial performance in the last quarter of 2022?
A: Ryanair posted a record profit for the last quarter of 2022, largely due to an increase in airfares by 14% compared to pre-pandemic levels.
Q: What are CEO Michael O'Leary's views on the deal with Boeing?
A: Michael O'Leary, the CEO of Ryanair, has expressed satisfaction with the deal, praising the larger, more efficient, and greener aircraft. Despite previous disagreements with Boeing, he acknowledged the company's significant progress in improving past issues.
Q: What are the next steps for the deal between Ryanair and Boeing?
A: The transaction will be subject to shareholder approval at Ryanair’s annual shareholder meeting scheduled in September.
Q: How significant is Ryanair to Boeing as a customer?
A: Ryanair is one of Boeing's largest customers, with more than 600 planes either in its fleet or on order.
Q: How is this deal expected to affect Boeing's financial standing?
A: The deal is a rare piece of positive news for Boeing, which has been struggling to recover from the financial impact of two fatal crashes involving its 737 Max model and the subsequent grounding of the model for 20 months. This agreement is expected to contribute to the company's recovery efforts.
