Boeing Co. secured a landmark order from one of its most important customers, with Ryanair Holdings Plc agreeing to purchase as many as 300 of the company’s largest 737 Max aircraft in a bet on the post-pandemic travel recovery.

The order, made up of 150 firm purchases and the same number of options, has a value of $40 billion, Boeing and Ryanair said in a statement May 9, though customers typically secure big discounts on major deals. Boeing shares jumped as much as 2.3% in premarket U.S. trading. Ryanair advanced 1.3% in Dublin.

The huge purchase of Boeing’s largest 737 variant marks an important endorsement from one of the U.S. manufacturer’s most loyal customers and highlights how carriers are willing to splurge on fleet upgrades again as air travel rebounds. Ryanair said the deal is largest order ever placed by an Irish company for U.S. manufactured goods.

“In addition to delivering significant revenue and traffic growth across Europe, we expect these new, larger, more efficient, greener, aircraft to drive further unit cost savings,”  Ryanair chief executive officer Michael O’Leary said in the release.

Deliveries will start in 2027 and 2033 and aim to replace many older 737NG aircraft.

By 2034, Ryanair will expand to carrying 300 million passengers, targeting market share in Europe of about 30%, O’Leary said. The airline will have about 550 aircraft by the middle of this year and increase that number to 800 over the next decade, O’Leary said.

Biggest Buyer

Ryanair is Boeing’s biggest buyer in Europe, having built its entire fleet of short-haul aircraft around the workhorse model. O’Leary said in late March that the airline had resumed talks with Boeing more aircraft.

The COVID-era shutdown of some European carriers and scaling back at others has created openings for Ryanair. O’Leary has cited growth in Italy, where Alitalia was succeeded by the smaller ITA, in Portugal, where state ward TAP is now up for sale, and markets in Ireland and Spain, where incumbents were slow to restore capacity, as providing Ryanair with ample opportunity for growth.

The budget airline is among companies that have predicted a summer booking surge, particularly on shorter-haul routes to sunny destinations like Spain or Italy. British-Airways parent IAG SA raised its forecast for the year last week.

Ryanair joins other airlines expanding their fleets, having repaired their balance sheets and repaid government loans. Deutsche Lufthansa AG said in March that it would buy 22 new wide body aircraft from Airbus SE and Boeing in an order valued at $7.5 billion at list price. A month earlier, Air India Ltd. announced a 470-plane order with the two manufacturers in what is the largest purchase in commercial aviation history to date.

Some Delays

The 737 Max 10 hasn’t been without hiccups. Long delayed, Boeing now expects the U.S. Federal Aviation Administration to begin certification flights for the aircraft this year, with the first deliveries expected in 2024. In December 2022, U.S. lawmakers struck a deal to exempt still uncertified Max 7 and 10 models from a a new cockpit requirement that would have taken effect at the start of 2023 and potentially caused more delays.

Airlines that have committed to the 737 Max 10 include Delta Air Lines Inc., United Airlines Holdings Inc. and IAG. The aircraft, which is still awaiting certification, competes with Airbus’s bestselling A321neo, as carriers move increasingly to the biggest versions of the most widely flown narrow-body jets.

Ryanair previously topped up its order for the 737 Max 8 version with a special high-density configuration to a total of 210 aircraft. It has already received about 100 of the airliner. The airline has continuously bought larger aircraft to expand capacity, going from the 737-800 with 189 seats to the Max 200 with 197 to the Max 10, which will have room for 230.

O’Leary is expanding the fleet as he seeks to grow traffic to 225 million passengers over the next four years. With its higher capacity 737 Max 8, dubbed the 8200, O’Leary claimed in January 2023 that there’s a widening cost gap between Ryanair and other European carriers. The even-larger Max 10 now gives him another weapon.