Ryanair Holdings PLC (LSE:RYA) and The Boeing Company (NYSE:BA) have returned to negotiations for a new shipment of 737s, after talks collapsed over pricing disagreements in 2021.
Ryanair boss Michael O’Leary said there was a “deal to be done” with Boeing for a bulk order of new 737-Max jets on Thursday, adding the two parties were talking again after negotiations broke down eighteen months ago.
Boeing confirmed the news, suggesting by the year-end its supply issues, and need to ask for higher prices, should be “in the rear-view mirror”.
O’Leary hinted the multimillion-dollar deal could be for the 737 Max 10 or the smaller 8200 version, which are powered by LEAP-1B engines from CFM International.
Ryanair currently operates 505 aircraft in its fleet, the majority of which are variants of the Boeing 737, able to carry near 200 passengers, though its subsidiary Lauda Air uses Airbus A320s.
He added Boeing’s willingness to talk was an “indication” it was open to “movement on pricing,” which had been lowered as the industry struggled through the pandemic.
Liberum analysts tipped Ryanair a ‘buy’ following the news, offering a share price target of €17, up from Thursday’s opening price of €14.9.
Boeing, meanwhile, has signed several orders with operators in recent weeks, including Saudi Arabia’s new Riyadh Air and Japan Airlines.
As a result, Liberum suggested its “bargaining position may not get any weaker," adding, “this is a good time for Ryanair to strike a deal”.