Tue, 9 May 2023 at 7:42 am BST
(Bloomberg) — Days after the World Health Organization declared the coronavirus pandemic over, Ryanair Holdings Plc is betting big on the travel recovery that’s gathered pace in recent months as bookings soar for city trips and summer vacations.
Europe’s largest discount airline is close to placing a major order with Boeing Co. for about 150 of the 737 Max 10 aircraft. The deal, set to be announced as early as Tuesday, includes the possible addition of 50 options, according to people familiar with the deliberations, who asked not to be identified discussing confidential negotiations.
The huge purchase of Boeing’s largest 737 variant marks an important endorsement from one of the US manufacturer’s most important customers and highlights how carriers are willing to splurge on fleet upgrades again as travel rebounds.
Ryanair is Boeing’s biggest customer in Europe, having built its entire fleet of short-haul aircraft around the workhorse model. Chief Executive Officer Michael O’Leary said in late March that the airline had resumed talks with Boeing for as many as 200 narrow-body aircraft, with potential delivery slated for the period between 2027 and 2031.
Boeing declined to comment, while Dublin-based Ryanair wasn’t immediately available to comment on the possible announcement. O’Leary will host a virtual press conference at 2 pm UK time, according to an invitation from the company.
The budget airline is among companies that have predicted a summer booking surge, particularly on shorter-haul routes to sunny destinations like Spain or Italy. British-Airways parent IAG SA raised its forecast for the year last week.
Ryanair joins other airlines expanding their fleets, having repaired their balance sheets and repaid government loans. Deutsche Lufthansa AG said in March that it would buy 22 new widebody aircraft from Airbus SE and Boeing in an order valued at $7.5 billion at list price. A month earlier, Air India Ltd. announced a 470-plane order with the two manufacturers in what is the largest purchase in commercial aviation history to date.
Other airlines that have committed to the 737 Max 10 include Delta Air Lines Inc., United Airlines Holdings Inc. and IAG. The aircraft, which is still awaiting certification, competes with Airbus’s bestselling A321neo, as carriers move increasingly to the biggest versions of the most widely flown narrow-body jets.
Ryanair previously topped up its order for the 737 Max 8 version with a special high-density configuration to a total of 210 aircraft. It has already received about 100 of the airliner. The airline has continuously bought larger aircraft to expand capacity, going from the 737-800 with 189 seats to the Max 200 with 197 to the Max 10, which will have room for 230.
O’Leary is expanding the fleet as he seeks to grow traffic to 225 million passengers over the next four years.
Reuters reported earlier on a possible announcement.
–With assistance from Julie Johnsson.
(Updates with fleet expansion in ninth paragraph)