Ryanair's Boeing Deal and the Rise of European Low-Cost Carriers

The 9/11 terrorist attacks on the World Trade Center led to a massive shift in the aviation industry, presenting an opportunity for Michael O'Leary and Ryanair to place a large order with Boeing that catapulted the airline into scale. This strategic move has been instrumental in establishing Ryanair's low-cost business model over the past two decades. As the industry faces challenges due to the coronavirus pandemic, Ryanair's efforts to secure a new order from Boeing have been met with the manufacturer's resistance, potentially creating an opening for rival airlines to consolidate.

Key Takeaways:

Ryanair's order with Boeing after the 9/11 attacks was a pivotal moment in the airline's history, making it a significant player in the European low-cost carrier market.
The airline's low-cost business model, driven by scale and cost advantages, has been the cornerstone of its success over the past two decades.
The recent collapse of Boeing talks with Ryanair, with Wizz Air taking an audacious tilt at easyJet, suggests that consolidation in the European airline industry may be inevitable.
Wizz Air's 4% market share, compared to easyJet's 11% and Ryanair's 15%, makes it a formidable competitor that could challenge Ryanair's position.
A potential merged entity between Wizz Air and easyJet would have significant bargaining power with Airbus, potentially disrupting Ryanair's arrangement with Boeing.

Statistics:

Ryanair's market share in the European short-haul market: 15%
EasyJet's market share in the European short-haul market: 11%
Wizz Air's market share in the European short-haul market: 4%
Number of convenience stores owned by Couche-Tard (Circle K's owner) in North America: nearly 10,000
Percentage of acrylic stores in Europe owned by Couche-Tard after the acquisition of Lundis stores: first multi-site acquisition in Europe

Sources:

Bloomberg
brian.carey@sunday-times.ie
Ryanair 1817161514
Mar, Apr, May, Jun, Jul, Aug: Source: Bloomberg