European ultra low-cost carrier Ryanair finalised an order for 175 Boeing 737-800 jets, the two companies announced this morning at the Paris Air Show.
The deal is worth $15.6 billion, and is Boeing’s largest European sale to date.
It will grow Ryanair’s fleet from 300 planes at the moment to 400 by the summer of 2018. The rest of the new 737s will replace current jets the carrier will retire.
That new capacity is needed because Ryanair plans to accommodate 100 million passengers per year five years from now, a 25% jump over its current numbers, CEO Michael O’Leary said at the press conference.
The cheap airline is notorious for considering anything it can to cut costs and fit more seats into its planes, bigger doors that would speed up boarding to eliminating seatbelts (neither will happen anytime soon). Naturally, Ryanair’s 737-800s will be laid out to fit the maximum 189 passengers on board.
O’Leary also said Ryanair is working on another order of about 200 Boeing 737-MAX jets, likely to be concluded within a year. That would be for at least 200 planes, or “it wouldn’t be worth doing,” he said.
Asked in Paris if he had looked into buying the Airbus A320 NEO, a MAX competitor, O’Leary said Ryanair gave it “serious consideration.” But the decision came down to the seat count: The Airbus holds nine fewer passengers than the Boeing, although its performance numbers are similar. The extra seats are what matters.
“You work out that maths…it would be a million bucks a year,” he said.
Boeing Commercial aeroplanes President and CEO Ray Conner added that the 737-800 offers better maintenance and operating costs, but O’Leary countered, “I don’t necessarily agree with that. I think it’s inevitable, each manufacturer says that they do slightly better. I think where they’ll finish up is that on fuel burn, the MAX and the NEO will be pretty similar.”
“But what’s compelling from the operator and the owner is that the MAX has more seats,” O’Leary added.
Operating costs and reliability do play a role, O’Leary said, adding “Boeing make great aircraft, Boeing have always made great aircraft, and Ryanair, which I think has the, certainly has the highest technical reliability, and is the most on time major airline in Europe, none of that would be possible without a great aircraft like the Boeing 737-800.”
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