This year’s biggest jetliner deal signals there’s a growing sense of optimism that travel demand will come roaring back from a historic collapse once coronavirus vaccines are widely available.
Betting that a recovery is on the way, Ryanair Holdings Plc ordered 75 high-density versions of Boeing Co.’s 737 Max in a transaction valued at about $7 billion, said Ryanair Chief Executive Officer Michael O’Leary. As rivals shrink fleets and postpone aircraft purchases, Europe’s largest budget carrier sees an opportunity and is accelerating delivery plans so that it takes all of its 210 Max jets on order by December 2024.
“Travel is going to snap back very strongly,” O’Leary said Thursday in a joint interview with Boeing CEO Dave Calhoun on Bloomberg TV. “This is an order not for next summer. This is for the next five years, the next decade across Europe.”
The deal is a breakthrough for Boeing as it works to bring back the Max after a 20-month grounding prompted by two crashes that killed 346 people. With the plane poised to start flying again after intense scrutiny by global regulators, Ryanair is providing a crucial boost to Boeing’s plans to ramp up work at its 737 factory near Seattle while also starting to clear an inventory of about 450 Max jets that were built during the grounding.
“The forecast for depleting that inventory is roughly a two-year time frame,” Calhoun said. “We are confident that can be done.”
Boeing surged 6% to $237.20 at the close in New York, the highest price since early March, just before the virus forced consumers around the world to isolate at home and nations to seal their borders. Ryanair climbed 2.7% to 16.23 euros in Dublin.