MIrish airline Ryanair is underscoring its growth ambitions with a major order for 300 new aircraft from US manufacturer Boeing. The new 737 Max 10 aircraft are expected to increase the airline’s capacity by 80 percent over the next ten years. In the financial year ended March 168 million passengers Ryanair flown. According to the plans of CEO Michael O’Leary, there should be 300 million passengers by 2034 thanks to the expanded fleet.
The significant expansion of the fleet fits the mood in the industry. Despite high inflation and its impact on the cost of living, airlines and tour operators are reporting record bookings. When it comes to travel, people don’t want to economize after they because of the Pandemic had to live with severe limitations for more than two years.
O’Leary described the order as “an ideal growth order for Ryanair, our passengers, our employees and our shareholders”. 150 aircraft have already been firmly ordered, and there is an option for the same number. They will be delivered in 2027 and 2033. Around half of the order will replace older 737NG aircraft.
A “groundbreaking deal”
The expansion of the fleet also goes hand in hand with an increase in the workforce. O’Leary held out the prospect of 10,000 additional jobs for pilots and flight attendants as well as for engineers at locations throughout Europe. Ryanair estimates the scope of the entire order at current prices to be 40 billion dollars (36.5 billion euros).
“However, previous transactions in the industry suggest that Ryanair may have enforced a significant discount to list price,” said Jarrod Castle, an analyst at UBS, who called the deal “another landmark deal.” In view of the scope, the shareholders still have to approve the order at the general meeting in September.
Talks between the two companies broke down more than 18 months ago due to a dispute over the prices for the Boeing machines. Since then, O’Leary has had the management of Boeing repeatedly criticized for the pricing policy, but also for the delays in delivery in recent years.
Now the airline has chosen the largest version of the Max class. The seating capacity in the new aircraft is one fifth higher than in the 737NG type, at 228. They are also more fuel-efficient. “These new, fuel-efficient aircraft with greener technology offer 21 percent more seating, burn 20 percent less fuel and are 50 percent quieter than our B737-NGs,” said O’Leary.
CFO Neil Sorahan put the price advantage in operation without fuel costs at ten percent. O’Leary promised that these savings would be passed on to customers through lower ticket prices in Europe. In this way, the airline’s price advantage over its European competitors could be secured for many years to come.
However, the Ryanair boss had warned in the past that the era of ultra-cheap tickets was over. He blamed inflation and the rise in energy prices as a result of the war in Ukraine. The time of the one-euro or 9.99-euro tickets be over, he had said in the summer. “I don’t think we will see these prices again in the next few years.” For the next five years, he predicted a jump in average prices of 40 euros. At 50 euros, however, they remain cheap.
No European airline with higher CO₂ emissions
The ordered Boeing machines are more economical, but run on conventional aviation fuel. Irish Transport Minister Eamon Ryan warned that sooner or later the company would have to switch to more sustainable fuels. Ryanair is an incredibly successful company from which Ireland has also benefited in many ways, he told the Irish Independent. “But they also know that aviation, like any other industry, has to operate within its climate limits.”
Ryanair’s carbon footprint is the highest of any European airline, according to research by Transport & Environment, an organization working to promote more sustainable transport. The airline already exceeded the values of 2019, before the outbreak of the pandemic, last year.
Ryanair itself supports research projects on alternative fuels. Hydrogen is considered a promising technology for the transport industry to reduce emissions to zero at best. However, the developments with green hydrogen are still in the early stages. A possible switch to alternative drive technology should already be considered when investing today, said Minister of Transport Ryan.
But the Ryanair management is skeptical. Sorahan admitted that he does not expect hydrogen to become widespread in his lifetime.
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