Boeing Wins First Big 737 MAX Order Since Grounding Ended
December 03 2020 - 11:31AM
Dow Jones News
By Andrew Tangel
Ryanair Holdings PLC on Thursday said it agreed to buy 75 of
Boeing Co.'s 737 MAX jets, a boost for the troubled plane maker
following the aircraft's prolonged grounding.
The European budget airline's deal is worth more than $7 billion
at current list prices. Ryanair chose to exercise the option it had
to buy additional aircraft on top of 135 it had previously agreed
to buy from Boeing.
The Ryanair deal is a reprieve for the struggling Chicago-based
aerospace giant, which has lost hundreds of MAX orders amid a
nearly two-year grounding following two fatal crashes of the jet --
-- and is now struggling amid a pandemic that has sapped demand for
air travel. The U.S. last month approved the MAX for passenger
flights again, issuing a set of safety directives and notices to
airlines globally.
Michael O'Leary, the airline's chief executive, said it would
accelerate its delivery schedule for the jets, saying the order
would help the airline's growth as travel demand returns. "We're
proud to buy them. We're proud to fly them," he said.
As of last month, airlines and aircraft-leasing firms had
canceled about 10% of Boeing's outstanding MAX orders this year.
Boeing has said it believes hundreds more of its remaining more
than 4,000 orders could be in jeopardy because of the financial
health of some customers.
Many customers have been able to walk away from their orders
without penalty, as generally allowed by Boeing contracts, because
their deliveries were more than a year late. The March 2019
grounding, after two crashes took 346 lives, lasted nearly two
years until U.S. regulators lifted it Nov. 18. Foreign regulators
are expected to lift their MAX flight bans in coming months.
Boeing is expected to resume MAX deliveries this month. United
Airlines Holdings Inc. has been expected to be the first customer
to receive a new MAX since American regulators ended the U.S.
grounding, people familiar with the matter said. One of the people
said United could take a new MAX as soon as next week, but added
the schedule was in flux.
Boeing last received new MAX orders in August -- -- two from
Poland's Enter Air and three from an unidentified customer, the
only previous sales this year. The manufacturer hasn't won a large
MAX deal since June 2019, when British Airways' parent company
announced it had signed a letter of intent to buy up to 200 of the
planes. The deal hasn't translated into a firm order formally
reported by Boeing.
While the precise terms of Ryanair's deal weren't disclosed, the
airline has a reputation for snatching up cheap aircraft while the
aviation industry is in a downturn, including placing an order for
100 of the older generation 737 in the months following the 9/11
attacks in the U.S. Mr. O'Leary has repeatedly expressed confidence
in the MAX after its grounding, but said he'd wait until the plane
had been recertified by regulators before placing an order for
additional planes.
Before the pandemic and government lockdowns hobbled global air
travel, the MAX's flight ban had hurt Ryanair's profit and prompted
the carrier to lay off employees and close bases.
Ryanair first signed a deal with Boeing for the aircraft in
2014, when it agreed to purchase 100 variants of the manufacturer's
MAX 8 jets, known as the MAX 200, that are able to carry 200
passengers.
(END) Dow Jones Newswires
December 03, 2020 11:16 ET (16:16 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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