By Andrew Tangel
Ryanair Holdings PLC on Thursday said it agreed to buy 75 of Boeing Co.'s 737 MAX jets, a boost for the troubled plane maker following the aircraft's prolonged grounding.
The European budget airline's deal is worth more than $7 billion at current list prices. Ryanair chose to exercise the option it had to buy additional aircraft on top of 135 it had previously agreed to buy from Boeing.
The Ryanair deal is a reprieve for the struggling Chicago-based aerospace giant, which has lost hundreds of MAX orders amid a nearly two-year grounding following two fatal crashes of the jet -- -- and is now struggling amid a pandemic that has sapped demand for air travel. The U.S. last month approved the MAX for passenger flights again, issuing a set of safety directives and notices to airlines globally.
Michael O'Leary, the airline's chief executive, said it would accelerate its delivery schedule for the jets, saying the order would help the airline's growth as travel demand returns. "We're proud to buy them. We're proud to fly them," he said.
As of last month, airlines and aircraft-leasing firms had canceled about 10% of Boeing's outstanding MAX orders this year. Boeing has said it believes hundreds more of its remaining more than 4,000 orders could be in jeopardy because of the financial health of some customers.
Many customers have been able to walk away from their orders without penalty, as generally allowed by Boeing contracts, because their deliveries were more than a year late. The March 2019 grounding, after two crashes took 346 lives, lasted nearly two years until U.S. regulators lifted it Nov. 18. Foreign regulators are expected to lift their MAX flight bans in coming months.
Boeing is expected to resume MAX deliveries this month. United Airlines Holdings Inc. has been expected to be the first customer to receive a new MAX since American regulators ended the U.S. grounding, people familiar with the matter said. One of the people said United could take a new MAX as soon as next week, but added the schedule was in flux.
Boeing last received new MAX orders in August -- -- two from Poland's Enter Air and three from an unidentified customer, the only previous sales this year. The manufacturer hasn't won a large MAX deal since June 2019, when British Airways' parent company announced it had signed a letter of intent to buy up to 200 of the planes. The deal hasn't translated into a firm order formally reported by Boeing.
While the precise terms of Ryanair's deal weren't disclosed, the airline has a reputation for snatching up cheap aircraft while the aviation industry is in a downturn, including placing an order for 100 of the older generation 737 in the months following the 9/11 attacks in the U.S. Mr. O'Leary has repeatedly expressed confidence in the MAX after its grounding, but said he'd wait until the plane had been recertified by regulators before placing an order for additional planes.
Before the pandemic and government lockdowns hobbled global air travel, the MAX's flight ban had hurt Ryanair's profit and prompted the carrier to lay off employees and close bases.
Ryanair first signed a deal with Boeing for the aircraft in 2014, when it agreed to purchase 100 variants of the manufacturer's MAX 8 jets, known as the MAX 200, that are able to carry 200 passengers.
(END) Dow Jones Newswires