Ryanair Orders 175 Boeings, but CEO Wants More Seats, Less Baggage
While Ryanair CEO Michael O'Leary finalized an order for 175 Boeing 737-800 aircraft at the Paris Airshow - Boeing's largest ever firm order from a European airline – he remained disappointed that neither Boeing nor Airbus could offer him a few more seats on their single-aisle aircraft to allow for cheaper fares.
As Boeing CEO Ray Conner stressed the fuel efficiency of the Boeing 737 against the Airbus A320neo, O'Leary was adamant that this wasn't the issue at hand: it was about the seats. The Airbus A320neo allows 180 passengers in a single class setting; the Boeing 737-800 allows nine more: 189 seats.
Yet even this is not enough for Ryanair's real long-term ambitions. O'Leary told CNBC he would like six extra seats, something that Boeing and Airbus alike will find difficult.
"They have regulatory issues, licensing issues, emergency evacuation issues, there are also technical issues, which I'll confess I don't really understand," he said, explaining why Boeing could not offer him 195 seats and one less toilet on board. "But you know, it seems to me a very simple thing: take out a couple of toilets and stick in six extra seats; let's do it today. They have a lot of issues they are dealing with, the 787 and everything else. I think it's a challenge for Boeing, it's something we'd like to see longer term because it would mean cheaper fares for passengers."
(Read More: Boeing Fights Back With New Dreamliner Orders)
With smaller manufacturers aiming to make a dent into the small aircraft market, with the likes of the new Embraer E-Jets and Bombardier CSeries, O'Leary said these new players were not on his radar. "Waste of time," he said bluntly. "If it's not a 180-189 aircraft, we don't want to know."
Ryanair's announcement will see 75 of the 737-800s replacing old stock with the other 100 representing totally new aircraft. The 175-strong order will be delivered over four years between 2014 and 2018.
O'Leary says the order will allow RyanAir 25 percent growth up to 2019, when he expects 400 aircraft in the Irish company's fleet and international passenger numbers to reach 100 million.
The International Air Transport Association (IATA) confirmed this week that Ryanair could still claim the mantra "the world's favoriteairline," after it emerged that Ryanair still carries the most international passengers in the world: 79.6 million. That figure is 29 million more than Lufthansa, with 50.8 million passengers. EasyJet had 44.6 million international passengers.
EasyJet, a clear Ryanair rival, announced on Tuesday that it had placed conditional orders with Airbus for 100 new A320neos and 35 A320s.
With O'Leary beginning to make more regular appearances in the U.S., notably CNBC's Squawkbox, questions have arisen over whether Ryanair would expand into the United States.
He told CNBC that he wanted to focus on operations in Europe currently, and dismissed the idea of becoming a regional player similar to Allegiant Air, who opened up smaller airports in the U.S. to air travel.
(Read More: Wide Body Planes Soar at Paris Air Show)
"We fly to 15 German airports, but Allegiant Air is a really niche play. We're a big pan-European airline; we're talking to the primary and secondary airports across Europe at the moment.
"Look: the growth we have at the moment is really pan-European. We have enormous demand from airports from the big countries – Spain, Italy, Germany, Poland, Scandinavia, even the Irish airports are back talking to us – and we're in active discussion with Manchester airport about a new growth agreement with Stansted. Across Europe, where air traffic numbers are flat or falling, where flight carriers are cutting their loss-making short haul capacity, there's enormous demand for our growth, and if you're an airport and you look around Europe, who's got the aircraft deliveries?"
O'Leary reiterated his commitment to eventually offering trans-Atlantic flights, and said the Boeing order would entice U.S. investors: "Now we've had the order it puts us back in with the growth investors in the States who said, 'Well, you don't have any aircraft coming in, you're an income stock.' We want to be in with a lot of growth shareholders in the United States and remarket ourselves to the growth investors in the U.S."
Discussing long-term plans for Europe, O'Leary told CNBC that when looking at new aircraft, he wants manufacturers to ensure larger carry-on luggage space for passengers. He wants the goal of a cargo-less Ryanair flight, something which would conversely slim down revenue, as 22 percent of Ryanair revenue comes from extra fees charged to passengers.
(Read More: Boeing to Airbus: We've Got You Boxed and Bracketed)
"We charge for checked-in bags not because we want the money. We just don't want the bloody bags," O'Leary said. "If we can drive that down to zero and have no checked-in bags at all, it would significantly speed up our turnaround and it would make it much easier for passengers to get through airports because they won't have to hang around the check-in desk and carousels. We'd also have lighter aircraft consuming less fuel.
"It's a self-fulfilling sweet spot: if we could get rid of people's bags they would have lower fares, and we'd make a fortune."