Boeing Corp. (BA) and Ryanair PLC (RYAAY) tied up a deal for up to 200 737 MAX airliners, likely to be worth over $10 billion.
Under the deal, tentatively announced in September, Ryanair will take at least 100 planes and will have options on another 100. At current list prices, that would give the order a maximum value of $22 billion.
The deal is further evidence of the importance of the discount airline model in driving modern aircraft design, particularly for planes designed for short-haul routes. Boeing said it expects discounters to account for over one-third of all demand for single-aisle aircraft by 2033.
The new 737 MAX plane can seat 200 passengers, up to 11 more than the airline’s existing 737s, while its CFM LEAP-1B engines allow it to improve fuel efficiency by up to 20% per seat.
The Dublin, Ireland-based discount airline, which has grown rapidly in recent years at the expense of Europe’s old national flag-carriers, said the extra capacity is needed for it to meet its target of hitting 150 million passengers by 2024, up from an estimated 89 million this year.
Ryanair has made hay this year as two of its biggest competitors in Europe, Air France (AFLYY) and Deutsche Lufthansa AG (DLAKY), have been ravaged by strikes by their pilots, in last-ditch attempts to stop the low-cost model eating into the traditional high levels of pay and perks enjoyed at the national champions.
Pilots at Lufthansa started another two-day strike Monday, forcing the German airline to cancel nearly half of its scheduled 2800 flights over Monday and Tuesday. The airline said the strike will hit 150,000 passengers.