Ryanair just placed Boeing’s most significant order ever. In what is believed to be the essential purchase ever set by an Irish company for US-made goods, Ryanair has reached an agreement to buy 150 new Boeing 737-10 aircraft and has options to buy another 150 of the same model.
According to a statement released by Ryanair (RYAAY) on Tuesday, the agreement is worth $40 billion at list prices. The information did not include any harsh criticism that CEO Michael O’Leary had previously thrown at Boeing because of delays in delivering the aircraft the airline had bought.
Boeing’s share price in New York rose by more than 3 percent. Ryanair was up 2%.
Read more: Biden Wants Airlines to Pay for Flight Cancellations and Delays.
The deliveries of the jets, which will take place between 2027 and 2033, will be the largest of Boeing’s (BA) 737 Max aircraft. The acquisition, which the largest low-cost carrier in Europe will complete, is expected to assist the company in increasing the number of passengers it transports from 168 million in the year ending in March 2023 to 300 million by the end of March 2034.
“Sustained traffic and tourism growth at lower fares (and lower emissions per flight) across all European countries where Ryanair continues to lead the post-Covid traffic, tourism, and jobs recovery,” Ryanair noted. “This new order will enable Ryanair to deliver sustained traffic and tourism growth.”
The low-cost carrier has rebounded from the epidemic faster than most of the aviation sector, gaining market share as some competitors have gone bankrupt or slashed their fleets and passenger capacity.
After boosting ticket prices by 14% compared to where they were before the epidemic, Ryanair reported a record profit for the three months ending on December 31. On May 22nd, it will publish its earnings for the entire year.
Ryanair, Boeing on better terms
On Tuesday, O’Leary expressed that the airline was “pleased to sign this record aircraft order,” which included “larger, more efficient, and greener aircraft.”
The outspoken airline president called Boeing’s management “headless chickens” in a stinging and profanity-laced condemnation of the delivery delays last year. This led to the airline terminating talks with Boeing over a pricing dispute.
In an interview on CNBC on Tuesday, Kevin O’Leary was asked if he regretted making such statements. He responded that he did not, even though he added, “I frequently shoot my mouth off, not always necessarily accurately.”
“In some ways, this is like being married. There are times when we get into arguments, and there are times when we get into altercations, but in the end, we make up, and I pay.
Dave Calhoun, the CEO of Boeing, stated during the same interview that he had no problem with O’Leary’s earlier comments.
“He was lucid. “His feelings were clear,” he commented. “That was a crucial message for the Boeing company to hear, for me to hear and for our team in Seattle to hear,” you said. “I’m glad you brought that up.”
According to Reuters, O’Leary stated on Tuesday during a news conference that Boeing has made significant headway in its pursuit to catch up. Concerning the cost of their services, the CEO of Ryanair made the following statement: “In our view, it will never be cheap enough, and in Boeing’s view, it is always far too cheap.”
The acquisition will require approval from Ryanair’s shareholders at the company’s annual shareholder meeting, which will take place in September. According to Ryanair’s website, the airline has more than 600 Boeing aircraft either in its fleet or on order, making it one of Boeing’s most important customers.
Boeing has been struggling to recover from two tragic incidents involving the 737 Max aircraft and has had difficulty closing the sale, making it a rare bit of good news for the company. Since the 737 Max was temporarily taken out of service for 20 months beginning in March 2019, the aircraft manufacturer has only reported one profitable quarter.
Regarding sales of single-aisle aircraft, which comprise the vast majority of the market for commercial airplanes, Boeing has significantly lagged behind its competitor Airbus (EADSF). However, Boeing has also experienced difficulties in the wide-body jet market, an area in which it is more competitive.
Because of issues with quality control, the company was forced to postpone delivery of the 787 Dreamliner for more than a year. Additionally, it was forced to delay the completion of the construction of its newest wide-body aircraft, the 777X, which won’t be available until at least 2025.
