Ryanair not expected to follow Norwegian Air in pulling €8bn Boeing order

Ryanair not expected to follow Norwegian Air in pulling €8bn Boeing order

Ryanair is expected to continue its talks with Boeing aimed at getting delivery of its 737-Max jets as soon as possible and looks highly unlikely to follow the lead of Norwegian Air and TUI in either cancelling or postponing orders and claiming compensation for the plane’s delayed delivery.

Boeing - whose rival Airbus looks set for major job cuts - began a series of long-delayed flight tests of its redesigned 737-Max with regulators at the controls on Monday, hoping to win approval and rebuild its reputation after fatal crashes that grounded the jet worldwide.

Ryanair is awaiting delivery of 210 of the jets. Norwegian Air has cancelled orders for 97 Boeing aircraft and will claim compensation from the planemaker for the grounding of the 737-Max and for 787 engine troubles that hit its bottom line.

“Norwegian has, in addition, filed a legal claim seeking the return of pre-delivery payments related to the aircraft and compensation for the company’s losses related to the grounding of the 737-Max and engine issues on the 787,” the airline said.

Norwegian did not specify the amount it would seek to claim from Boeing, which it had been in talks with about compensation. Boeing said it was working with Norwegian on a path forward in a challenging time, as it was with other operators.

While Norwegian basically cannot afford to proceed with its Max order, Ryanair is viewing the plane's delivery as key to its growth and is pinning a return to a 150 million passenger summer, next year, on getting some of its new planes, which promise more fuel efficiency and 4% more seat capacity.

Due to Covid restrictions and no Max planes, Ryanair is likely to carry less than 80 million passengers in its current financial year, which runs to the end of next March. In February, it said it would be September or October of this year before it sees its first Max delivery.

However, US approval - not to mention European approval - for the Max's return to the skies is not expected until at least September.

Davy aviation analyst Stephen Furlong said Ryanair is virtually unique – in Max terms – insofar as it is one of the few airlines that actually wants the plane right now and has a balance sheet to afford it. He also said Ryanair could benefit from any post-approval deliveries as domestic and short-haul routes are likely to be the first recovery points in air travel.

Ryanair is expected to seek further discounts from Boeing and could seek a fresh order of Boeing’s slightly larger, still, Max-10 aircraft.

-additional reporting Reuters

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