As has been reported by the press in the past few weeks, Boeing is back in talks with Europe’s largest airline group, Ryanair, for a further order for 737 MAX aircraft. The purchase would be aimed at bridging the airline’s needs after 2025, when it will finish receiving aircraft from its current request for 210 Boeing 737 MAX 8200.

The information was first confirmed by Ryanair’s Group CEO Michael O’Leary to the Financial Times, and then reiterated by him during the Airlines for Europe (A4E) 2023 Summit in Brussels this Wednesday.

According to Reuters, the «potential deal» could see the group making 100 firm orders with another 100 options; O’Leary claimed that negotiations were restarted two months ago after Boeing’s CEO, Dave Calhoun, and the manufacturer’s commercial division CEO, Stan Deal, approached the company.

«I think it takes maybe six, nine months to get a deal done», said the Irish airline tycoon.

Ryanair had walked out — in typically loud fashion — of negotiations with Boeing for this follow-on order in 2021, after the group disagreed with the American company’s «optimistic pricing outlook».

One and a half years later, Boeing seems to be in a better position regarding the 737 MAX program — with important agreements coming from important airlines, the largest of which from Air India. As such, slots for the post-2025 timeframe seem to be dwindling, with the bargaining power of Ryanair decreasing.

How about the larger 737 MAX 10?

More interesting is the fact that O’Leary again stated this next deal could consider the largest version of the 737 MAX series, the 737 MAX 10.

The current MAX variant operated by Ryanair, the 8200 (known by the group as the «Gamechanger») has the fuselage of a MAX 8 (the equivalent of a 737-800 in the older generation) but is configured to carry even more seats — 197 instead of 189, which helps to dilute costs over a higher number of customers.

This same idea of driving higher volumes could apply to the MAX 10, which can carry up to 230 customers, according to Boeing. Further reducing unit costs — something that is very dear to Ryanair — would be the main pitch.

This choice has been in the group’s minds for a good time. In a hearing at the Transport Committee of the Oireachtas (the Irish parliament) last November, O’Leary implied the MAX 10 could be the next new aircraft in Ryanair’s fleet. This was mentioned when discussing the reaccommodation of passengers from the 8200 to a 737-800, should the former have technical problems upon departure.

«The big challenge facing us now is looking at the next aircraft order. Do we go up to the MAX 10, which is about a 230 seat aircraft? And that would be much more challenging if we start taking, we order 200 of those aircraft and one of those goes tech, then we will have trouble. But every airline faces those consequences».

Back then, O’Leary confirmed negotiations were still halted.

(The answer is available at around 2 hours and 59 minutes in the video below, published by Irish aviation journalist Eoghan Corry.)

Another issue for Ryanair’s business model, if it were to order the 737 MAX 10, would be its short turnarounds. Currently, the airline turns around a plane in 25 minutes, which helps increase productivity of crews and aircraft.

With around 30 additional seats over its current largest aircraft, the question would be if Ryanair would give up the 25 minutes turnaround for a better on-time performance, or if it could keep this «golden» number with larger aircraft.

Hungary’s Wizz Air, for one, has the majority of its fleet composed by 230-seater Airbus A321 and 239-seater A321neo. In its investors’ presentation of July 2022, it claimed to do «30 [minutes] average» turnarounds.

But if the larger aircraft is being considered, there are naturally upsides to the group’s operations, should it choose to purchase it.

In Brussels, Michael O’Leary told Bloomberg it will all be ultimately down to the prices Boeing offers for either the MAX 8200 or the 10.

«If they give us a good discount on the extra 30 seats, we’re more likely to take MAX 10s», said the executive. «If they don’t give us a good discount on the extra seats, we’re more likely to go with an additional MAX 200s.»

What is clear is a deal will come sooner or later. As of its last annual report in July 2022, the Ryanair Group officially planned to stabilize its fleet after the last delivery of the 210 MAX 8200 (as there would be no other confirmed orders).

A report by The Economist a week ago, however, said that Ryanair intends to grow its traffic to 300 million yearly passengers by 2035 — way up from its current target of 225 million customers by its financial year ended in March 31st, 2026. And unless the airline starts to carry passengers in the overhead lockers and baggage holds, it will need more aircraft to reach that number.

But the price also has to be right, as the Irish group is known for rocking huge discounts on the aircraft it purchases — particularly during times when demand for new airplanes is lower. «If the rumors are true», the Economist says, the airline purchased 75 Boeing 737 MAX 8200 for a third of list prices in its follow-on order during the COVID-19 pandemic.

This is not the case now (despite higher interest rates, demand for air travel remains high), but one would not bet against Ryanair getting a very attractive deal for its next order.