Boeing lands crucial Max deal from Ryanair as grounding ends

The Dublin-based carrier will add to an existing Max purchase by taking 75 more 737-8s.

By Julie Johnsson and Siddharth Philip / Bloomberg

The Boeing Co. sealed a landmark order for its 737 Max jet from Ryanair in a major boost for the U.S. plane-maker’s efforts to revive its best-selling model after a 20-month grounding.

Dublin-based Ryanair will add to an existing Max purchase by taking 75 more of the single-aisle aircraft, which are built in Renton, the companies said in a statement Thursday. The firm order has a list value of $9.4 billion before significant discounts that are customary for aircraft purchases.

The deal gives the embattled Max a seal of approval from Europe’s most valuable airline as Boeing attempts to restore global confidence in the workhorse jetliner. Regulators worldwide grounded the plane in March 2019 after two crashes in less than five months killed 346 people. It was cleared to fly again by the U.S. Federal Aviation Administration last month, while European regulators granted preliminary approval.

“Ryanair is once again placing its confidence in the Boeing 737 family and building their future fleet with this enlarged firm order,” Boeing Chief Executive Officer Dave Calhoun said. “We firmly believe in this airplane and we will continue the work to re-earn the trust of all of our customers.”

The additional jets position Ryanair to expand in coming years as travel rebounds from a collapse caused by the coronavirus pandemic and financially weaker competitors nurse their balance sheets back to health. CEO Michael O’Leary called the plane a game-changer that will enable his airline to add capacity while reducing fuel burn.

The order takes Ryanair’s Max backlog to 210 planes, all of them higher capacity 737-8-200 variant, with deliveries set to commence next year. O’Leary said in the release he expected customers would “love these new aircraft,” without mentioning the model’s safety record.

Ryanair and Boeing agreed to revised delivery dates for the Max following its idling, together with compensation to cover direct costs incurred. Some of that money was factored in as a “modest reduction” in the final pricing of the new aircraft, the carrier said.

Boeing has lost hundreds of orders for the Max this year, ceding ground to Airbus and enabling the European manufacturer to widen its lead in the critical market for narrow-body jets.

While both companies have been in intense negotiations with customers because of the pandemic, Boeing has had to contend with the added burden of resolving compensation claims for deliveries that were postponed due to the Max’s idling.The grounding has given customers the ability to walk away from contracts where delivery was delayed for more than a year. Boeing has also been seeking new homes for about 100 so-called white tails — jets built during the hiatus and later abandoned by buyers.

Boeing has garnered a handful of small orders for the Max since the plane’s grounding and last year landed a letter of intent for 200 planes from British Airways owner IAG. That deal hasn’t been finalized.

Ryanair first ordered the Max in 2014, and O’Leary has been a vocal supporter of the model during the grounding.

While the pandemic has decimated travel, the CEO has said he expects the availability of a vaccine to boost traffic to near-normal levels by summer 2021 — and possibly by Easter, which falls in early April.

Talk to us

More in Herald Business Journal

Members of Gravitics' team and U.S. Rep. Rick Larsen stand in front of a mockup of a space module interior on Thursday, August 17, 2023 at Gravitics' Marysville facility. Left to right: Mark Tiner, government affairs representative; Jiral Shah, business development; U.S. Rep. Rick Larsen; Mike DeRosa, marketing; Scott Macklin, lead engineer. (Gravitics.)
Marysville startup prepares for space — the financial frontier

Gravitics is building space station module prototypes to one day house space travelers and researchers.

Orca Mobility designer Mike Lowell, left, and CEO Bill Messing at their office on Wednesday, Aug. 16, 2023 in Granite Falls, Washington. (Olivia Vanni / The Herald)
Could a Granite Falls startup’s three-wheeler revolutionize delivery?

Orca Mobility’s battery-powered, three-wheel truck is built on a motorcycle frame. Now, they aim to make it self-driving.

Catherine Robinweiler leads the class during a lab session at Edmonds College on April 29, 2021. (Kevin Clark / The Herald)
Grant aids apprenticeship program in Mukilteo and elsewhere

A $5.6 million U.S. Department of Labor grant will boost apprenticeships for special education teachers and nurses.

Peoples Bank is placing piggy banks with $30 around Washington starting Aug. 1.
(Peoples Bank)
Peoples Bank grant program seeks proposals from nonprofits

Peoples Bank offers up to $35,000 in Impact Grants aimed at helping communities. Applications due Sept. 15.

Workers build the first all-electric commuter plane, the Eviation Alice, at Eviation's plant on Wednesday, Sept. 8, 2021 in Arlington, Washington.  (Andy Bronson / The Herald)
Arlington’s Eviation selects Seattle firm to configure production plane

TLG Aerospace chosen to configure Eviation Aircraft’s all-electric commuter plane for mass production.

Jim Simpson leans on Blue Ray III, one of his designs, in his shop on Friday, August 25, 2023, in Clinton, Washington. (Ryan Berry / The Herald)
Whidbey Island master mechanic building dream car from “Speed Racer”

Jim Simpson, 68, of Clinton, is using his knowledge of sports cars to assemble his own Mach Five.

An Amazon worker transfers and organizes items at the new PAE2 Amazon Fulfillment Center on Thursday, Sept. 14, 2023, in Arlington, Washington. (Ryan Berry / The Herald)
Amazon cuts ribbon on colossal $355M fulfillment center in Arlington

At 2.8 million square feet, the facility is the largest of its kind in Washington. It can hold 40 million “units” of inventory.

A computer rendering of the North Creek Commerce Center industrial park in development at 18712 Bothell-Everett Highway. (Kidder Mathews)
Developer breaks ground on new Bothell industrial park

The North Creek Commerce Center on Bothell Everett Highway will provide warehouse and office space in three buildings.

Dan Bates / The Herald
Funko president, Brian Mariotti is excited about the growth that has led his company to need a 62,000 square foot facility in Lynnwood.
Photo Taken: 102312
Former Funko CEO resigns from the Everett company

Brian Mariotti resigned Sept. 1, six weeks after announcing he was taking a six-month sabbatical from the company.

Cash is used for a purchase at Molly Moon's Ice Cream in Edmonds, Washington on Wednesday, Aug. 30, 2023. (Annie Barker / The Herald)
Paper or plastic? Snohomish County may require businesses to take cash

County Council member Nate Nehring proposed an ordinance to ban cashless sales under $200. He hopes cities will follow suit.

A crowd begins to form before a large reception for the opening of Fisherman Jack’s at the Port of Everett on Wednesday, August 30, 2023, in Everett, Washington. (Ryan Berry / The Herald)
Seafood with a view: Fisherman Jack’s opens at Port of Everett

“The port is booming!” The new restaurant is the first to open on “restaurant row” at the port’s Waterfront Place.

Tanner Mock begins unwrapping new furniture that has been delivered on Thursday, Aug. 24, 2023 in Everett, Washington. (Olivia Vanni / The Herald)
In Everett, new look, new name for mainstay Behar’s Furniture

Conlin’s Furniture, based in South Dakota, bought the huge store and celebrates with a grand opening this week.