30 Jun 2021
Posted in Travel & Tourism
Ryanair will gain competitive advantage with Boeing 737 Max launch, says GlobalData
Ryanair finally announced its first arrival of the Boeing 737 Max jet, which is described by the low-cost carrier as a ‘game-changer’. Despite the grounding of the aircraft in 2019 over safety concerns, Ryanair negotiated purchases of 210 units, with a maximum of 12 operating for the 2021 summer season. The aircraft will enhance Ryanair’s sustainable proposition by reducing fuel consumption by 16% per seat, reducing noise emissions by 40%, and enabling an additional 4% passenger capacity – all of which will give Ryanair a strong competitive advantage over the next five years, says GlobalData, a leading data and analytics company.
The sustainability benefits of the aircraft will meet changing consumer preferences for more environmentally friendly products. According to GlobalData’s Q1 2021 Consumer survey, 76% of respondents said they were ‘always’, ‘often’, or ‘somewhat’ influenced by the environmental friendliness of a product, highlighting the appetite for more sustainable aircraft. As a result, Ryanair finds itself in a unique position by meeting modern-day consumer trends and its traditional core market by offering low-cost fares. A recent GlobalData poll* further supported this sentiment towards low-cost fares, with 53% of respondents saying cost was the most crucial factor when selecting an airline.
Craig Bradley, Associate Travel & Tourism Analyst at GlobalData, comments: “Ryanair has understood and built on its brand by not only offering low fares, but offering a greener and potentially even lower-cost service to its customers. As a result, the product will not only attract environmentally conscious travelers, but continue to meet its core mass-market regarding low-cost fares.”
Safety concerns remain following the tragic Lion Air crash in October 2018 and Ethiopian Airlines crash in March 2019. These incidents have caused some airlines to cancel orders and seek compensation. Ryanair, however, remains committed to the 737 Max and, according to the CEO Michael O’Leary, the company has secured a ‘very modest’ price discount on the order.
The aircraft was also heavily scrutinized by the Federal Aviation Administration (FAA) during the two years it was grounded and the decision to let it take to the skies again has not been taken lightly.
Bradley adds: “Ultimately, the lower operating costs of the aircraft fit perfectly into Ryanair’s business model. Most airlines cannot purchase new aircraft or commit to leases due to the pandemic, leaving them with an older, less economic fleet. As Ryanair tackles the post-pandemic travel rush in 2022 with low, but more profitable fares, it will have gained a clear competitive advantage over many other airlines.”