Ryanair is to Europe what Southwest represents in the U.S. – the Irish low-cost carried more people on the continent in 2019 than the traditional Lufthansa, IAG group (British Airways, Iberia and others) and Air France-KLM. A total of 152 million passengers boarded their 340 Boeing 737s last year.
Therefore, it is not absurd to say that when the company’s CEO Michael O’Leary decides to speak, his statements echo in Chicago, where Boeing is headquartered. And the CEO spoke on Monday in Dublin, Ireland. And it revealed something that would make the planemaker celebrate if it did not go through a delicate moment: a new order of 737 Max jets, but of the -10 variant, the largest of the model and which had the roll out of the first plane recently.
With a capacity for 230 passengers, the Max 10 is a palliative solution for Boeing’s most loyal customers and who do not admit to having another supplier in their fleet. Yes, because the largest 737 of all time does not reach the performance of the impressive A321XLR, the “destroyer of widebodies”, due to its ability to reconcile a high number of seats with a transoceanic range – and costs well below any two-aisle jet.
But for an airline that, like its “twin” Southwest, advocates fleet standardization on just one type of aircraft, the Max 10 is worth gold. Still, O’Leary proudly stated that “to be fair to them (Boeing) I don’t think the new management team is in a position to be able to talk to us about a new order”. In the CEO’s view, Boeing must first put the 737 Max back into service before considering considering any new purchase agreements.
Head of the queue
On the other hand, Ryanair is absolutely right to be disappointed with Boeing. The airline planned to reach the mark of 200 million passengers transported in 2024 and the 737 Max was crucial for this. O’Leary said he expected to have 55 jets in his fleet by the middle of this year, but now believes that this will only happen in 2021.
Ryanair was about to receive its first 737 Max last year when the second Ethiopian Airlines aircraft crash triggered the grounding of the entire fleet in March. A hard blow for the Irish, but more than that, an embarrassment for Boeing precisely with one of its biggest customers and which has no less than 210 units ordered for the new 737.
This awkward situation for Boeing has put the manufacturer against the ropes. Having frustrated the plans of dozens of airlines that counted on the savings provided by Max to design new routes and expand their capacity, the planemaker was indebted to them. It is no wonder that several of them have been able to obtain financial compensation in an account that is already in the billions of dollars.
But perhaps that is not enough – O’Leary may say so. The Ryanair boss has already marked territory in the new Max 10 negotiation: “We expect to reprice the Max order we already have and we would expect to put in place or agree a deal with Boeing on new aircraft pretty soon after the return to service has been resolved,” he said. “Airbus have now a 12- and 18-month lead over Boeing in terms of aircraft orders and the new management team at Boeing need to be capturing back that lead and the starting point should be their biggest existing customers, which is Southwest and Ryanair”, he added.
