Any thoughts that Ryanair might take advantage of the new 737 MAX Long Range to cross the Atlantic were dispelled last Thursday in Copenhagen when, speaking to Flight Chic, the airline’s CMO Kenny Jacobs said without hesitation that the airline would not consider buying any.
Jacobs and the airline’s CEO Michael O’Leary also confirmed that Ryanair had no interest in transatlantic service, and that the Long-Range MAX’s seating capacity which would not fit the airline’s needs.
“Long range? No. I was in Seattle last week so I saw the long-range variant of the Boeing MAX. Yes, while they can do it, we still don’t want to. It doesn’t change our thinking. The longest route we’d do would be a Glasgow to Teneriffe route,” Jacobs said. “While the variant of the MAX can travel further, it can travel further when you have the cabin configured to 160 passengers, 60 in business and 100 in economy. Our MAX would be carrying 187.”
This take on the long-range max is not insignificant. Ryanair has Europe’s largest fleet of Boeing 737s, celebrated its 400th delivery this April, has offered to buy up any 737s other Boeing customers leave behind, and was the launch customer for Boeing’s 737 MAX 200 which the airline’s CFO described as “a game changer” this summer.
The 737 MAX 200 can be configured up to 200 seats, but Ryanair has opted not to use that full capacity.
During the same press conference in Copenhagen last Thursday, the airline’s CEO cited the lack of availability of adequate long-haul aircraft as contributing to Ryanair’s decision not to fly long-haul routes.
“Long haul is off the table for at least the next five years,” O’Leary said. “We don’t have any long-haul aircraft orders. We can’t get any long-haul aircraft cheaply. Prices of long-haul aircraft, particularly narrow-body long-haul aircraft are high. The orders at Boeing and Airbus extend out into the early 2020s. The Gulf carriers have mopped up most of those orders. Therefore, the circumstances at the moment…A key prerequisite of long-haul cost airlines is that they have long-haul low cost aircraft.”
O’Leary also cited the difficulties Norwegian Air International’s has encountered establishing service as an Irish carrier on routes to the U.S.
“I would also be concerned at the way Norwegian have been shamefully blocked on their intent to fly from Cork to New York. Despite the fact that Norwegian are a competitor, I think the behaviour of the American unions and the US government has been shameful. The response of the European Commission is equally shameful. We’re supposed to have Open Skies between Europe and the U.S. and the European Commission has sat on its fat arse doing nothing about it while the Congress has been delaying their license. You shouldn’t need a license in an Open Skies situation. Norwegian should be granted the license and we support their right to fly to New York,” he said.
But O’Leary said in the end the lack of aircraft is decisive. “For us, at the moment, until we can secure the aircraft, and that’s at least five years out..The only alternatives are essentially the 787 or A330,” O’Leary concluded.
Sticking to What You’re Good At
Kenny Jacobs focused the conversation back to European strategy, however, saying: “It’s also a very good time just to keep our focus on Europe.”
Jacobs explained this to Flight Chic, saying:
“It’s about sticking to what you’re good at, what we’re better than anyone at in Europe. While you have a fairly ripe market–although fares are soft and Brexit creates wider Economic uncertainty in Europe–it’s still a market for us to keep fares down and keep costs down. The market share will look after itself, whatever market you go to. It’s just a good time to good time for low costs to keep going.”
Nonetheless, Ryanair’s take on the economics of the Long-Range 737 MAX raises an important question: If Ryanair couldn’t find a way to make 737 MAX long-range transatlantic service economically viable, how will less cost efficient airlines support their long-range stretch plans for either 737 or A321neo aircraft long range variants?
While the Irish carrier is known for its provocative and sometimes outrageous marketing stunts, when it comes to business Ryanair is conservative and risk averse. That attitude has kept Ryanair growing and profitable for years.