Ryanair takes off, fuelled by massive new $40bn order at Boeing

The markets liked the move, which deepened confidence that Ryanair will continue to build market share with its bold post-pandemic strategy.

Ryanair is ordering up to 300 Boeing 737 Max 10 aircraft for delivery between 2027 and 2033, in a deal worth up to $40bn.

Ryanair’s European market share is about 22pc and they’re aiming at 30pc

Its aircraft order will be substantially funded from internal cashflows. Prior to last Tuesday’s announcement, Ryanair still had 110 aircraft waiting to be delivered to the group over the next two years.

A note from Bank of America Global Research said: “Ryanair’s new MAX 10 order offers attractive earnings growth over the next decade, as it continues to gain market share in Europe while enhancing its already competitive ultra-low-cost position.”

That note said it expected Ryanair’s chunk of the market to keep on soaring.

“The 300 Boeing MAX 10 order (150 firm, 150 options) for delivery in 2027 to 2033 will take the fleet from 537 to 800. Management aims to deploy the new aircraft on longer routes and at slot-constrained airports,” said Bank of America analysts Muneeba Kayani and Paul Kirjanovs.

“Our analysis shows Ryanair’s market share in Europe is now circa 22pc – up from circa 9pc in 2007 – suggesting it can meet its 30pc target.”

The Boeing order will also strengthen Ryanair’s low-cost model.

“Cost benefits from the new aircraft will further strengthen its cost position and support share gains,” said BofA.

A daily note from Cantor Fitzgerald in Dublin delved further into the benefits of a more modern fleet.

“These new MAX 10 aircraft ordered yesterday are larger than the existing Boeing planes which Ryanair flies, typically carrying up to 20pc more passengers.

Michael O’Leary is never short of ambition

“They will also offer fuel efficiency savings, and 50pc of the orders are expected to replace existing Boeing planes.”

Ryanair chief executive officer Michael O’Leary is never short of ambition – and the passenger numbers the company is forecasting are staggering.

“This order is a sign of confidence from Ryanair in the outlook for passenger growth beyond 2026, when they are guiding to carry 225 million passengers, up from 168 million in the current financial year ending March 2023, stating they are targeting 300 million passengers by 2034, an increase of 80pc over the next decade.”

Ryanair recently said it carried a total of 12.6 million passengers in March of this year – an increase of 12pc on the 11.2 million passengers it carried in the same month last year.

Already Europe’s largest airline by passenger numbers, Ryanair reported after-tax profits of €211m in the three months ended December 31, its third quarter.

This compares to a loss after tax of €96m for the same period the previous year. It also reiterated its forecast of after-tax profit between €1.325bn and €1.425bn for the year to the end of March 31.

Said Cantor Fitzgerald: “These Q3 figures and recent management comments, together with strong trading performance from peers, provide further evidence of ongoing passenger demand for air travel post-Covid.”