Boeing’s 737 Max program received a major boost Thursday with a milestone order from Ryanair for 75 more of what the manufacturer now calls the 737-8-200, increasing the European LCC’s Max order book for the high-density, 197-seat variant to 210. Signed during an online press briefing from Boeing offices in Washington, D.C., the contract calls for deliveries to start early in 2021 and run until December 2024.
Ryanair hopes to take between 25 and 30 of the aircraft in time for the European summer flying season, according to CEO Michael O’Leary, who noted that the airline’s fleet plans assume passenger traffic to increase to between 95 and 130 million from just 35 million this year. In 2019 the airline carried 149 million passengers. Over the next five years, Ryanair plans to expand the size of its fleet from 450 to 600 aircraft and increase its traffic to 200 million passengers.
O’Leary, who valued the incremental order at some $7 billion, called the discount on the sale and the compensation from Boeing for failed deliveries due to the Max grounding “modest.”
“My only complaint today is I think the discount should have been bigger,” quipped O’Leary. The Ryanair boss added that the airline’s shareholders raised $1.25 billion in the bond market in September in preparation for the purchase financing.
Boeing CEO David Calhoun insisted that the company will not try to artificially pad its backlog for the Max with unsustainably low prices, noting he will allow the performance of the aircraft “to speak for itself.”
“I’m not concerned about price discounts as incentives to move airplanes,” said Calhoun. “It will require patience on the part of Boeing, which we have…We believe strongly in a recovery and therefore we will stay patient. So we don’t feel a need to discount our way into the marketplace.”
For Boeing, the deal marks the biggest Max order since the airplane’s grounding in March 2019, following the twin crashes of the airplane that claimed 346 lives. “We have had one rough year,” said Calhoun. “Michael [O’Leary] visited with me during my first couple of weeks on the job in January. At that time there was no Covid…there was no discussion on Covid, it was a discussion on safety. And since that moment, every couple of weeks [we have] been on the phone to talk about the progression of this airplane through the regulatory process and reaffirming our faith in the airplane and our commitment to safety, every step of the way, and our willingness to allow the regulators do anything and everything they wanted to do to this airplane.”
On the subject of the apparent decision not to call the airplane the 737 Max in its press literature and during the sales announcement, Calhoun denied any effort to rebrand the product. “There is no rebranding going on; there is nothing cute about the way we’re emphasizing the 737 family because the Max is an airplane inside the 737 family,” he said.