Ryanair Holdings plc (LON:RYA) said it has signed a purchase agreement with aircraft maker Boeing Co (NYSE:BA) for 75 new MAX-8200 aircraft, increasing its total firm order to the plane model to 210 from 135 previously for a price tag of over US$22bn.
On Thursday, the budget airline said it expects first deliveries of the aircraft to begin in early 2021, with the 210 planes to be delivered over a four-year period from next spring until December 2024.
Ryanair said it will use the new aircraft to grow its services into new EU countries and markets, adding that Boeing has also agreed to revised delivery dates and “compensation for the direct costs incurred by Ryanair over the past 18 months” due to the order being delayed.
Some of this compensation has been factored into a “modest reduction in the pricing of the new aircraft order”, Ryanair said, adding that this had encouraged it to increase its total order to 210 planes.
"We are pleased and proud to place this enlarged order with Boeing, who have successfully completed the return to service of the Boeing MAX aircraft. The Boeing MAX is a fabulous aircraft with more seats, more leg room, lower fares, lower fuel consumption, and it sets incredible environmental standards, including 40% less noise and lower CO2 emissions”, Ryanair chief executive Michael O'Leary said in a statement.
“We hope to take delivery of at least 50 of these aircraft in 2021, subject to Boeing recovering its manufacturing output to deliver them. For as long as the Covid-19 pandemic depresses air travel, we will use these new aircraft to replace some of our older Boeing NG fleet, which will remain grounded until pre-Covid demand returns”, he added.
The MAX aircraft was grounded by aviation authorities in March last year after the aircraft was involved in two fatal crashes that cost the lives of 346 people. After an extended investigation and repair period, the model was cleared to fly by US aviation regulators last month.
The incident has caused a financial and reputational headache for Boeing, which found itself stuck with a backlog of orders for the aircraft after the crashes, an issue that was then compounded by the coronavirus pandemic which saw air travel grind to a halt and its airline customers looking to renegotiate or cancel orders to save cash.
Shares in Ryanair were up 0.9% at €15.97 in late-afternoon trading.