(Bloomberg) -- Airbus SE may end up with a significant new customer as Ryanair Holdings Plc looks to beef up a newly acquired unit that uses planes from the European manufacturer.
Ryanair, which previously operated only Boeing Co. aircraft, will expand the fleet at Austria’s LaudaMotion to many as 50 Airbus A320s over four years and the narrow-body model could eventually account for 20 percent of the group’s overall roster, Chief Executive Officer Michael O’Leary said in an interview Monday. That might amount to more than 100 jets.
Airbus has previously downplayed the chances of winning orders from Ryanair, suggesting the Irish carrier only wanted to secure deeper discounts from Boeing. O’Leary said his company could look to add aircraft from the existing backlogs of both planemakers if airlines go bust as oil prices climb, citing Norwegian Air Shuttle ASA as one operator where jets may become available.
“In a downturn there will be opportunities at both Airbus and Boeing,” O’Leary told Boomberg Television. “If something does happen with Norwegian they have huge order books and a lot of those aircraft will be floating around. We would like to opportunistically be able to jump on some of them.”
Executive changes at Airbus may help ease relations with the Toulouse, France-based company, O’Leary added. Longtime sales chief John Leahy retired recently to be replaced by Eric Schulz, while Fabrice Bregier, head of the jetliner unit, has also left and CEO Tom Enders will depart early next year.
“We are Europe’s largest airline,” O’Leary said. “We should have a supply relationship with Boeing and we should also have a supply relationship with Airbus.” Ryanair ranks as the region’s No. 1 by passenger traffic, though other airlines are bigger measured by traffic, or customers times the distance flown.
Discount carriers traditionally favor the simplest structures in order to trim expenses, something that’s led them to avoid mixed fleets that could increase maintenance and operating costs. Ryanair currently has 455 planes, all of them Boeing 737-800s, and plans to expand to 585 by 2024, including orders for 210 new-generation 737 Max 8 aircraft that will start arriving next April.
Europe’s biggest low-cost airline is able to be more flexible as its fleet reaches a size that’s big enough to accommodate planes from two manufacturers without jeopardizing economies of scale, Chief Operations Officer Peter Bellew said in an interview in Dublin last week.
Airbus told Bloomberg that it is “always up to discuss fleet requirements with customers,” while adding that all such discussions are confidential.
Ryanair will initially take on 20 A320 planes after investing in LaudaMotion, which was set up by former motor racing champion Niki Lauda and later became part of failed German carrier Air Berlin Plc. The discount giant has purchased a 24.9 percent stake which it wants to increase to 75 percent, subject to European Union antitrust approval.
Ryanair Chief Marketing Officer Kenny Jacobs, who also spoke in Dublin, cautioned that fleet decisions ultimately come down to price, which might mean the airline “ends up always being Boeing.”
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