Why Ryanair’s $500m engine investment makes perfect sense
Ryanair is betting big on its future fleet resilience, confirming a deal to acquire 30 spare CFM LEAP-1B engines in a $500 million agreement that forms part of a broader strategy to bolster operational independence and reduce reliance on third-party maintenance providers.
The deal, announced on 10 June, will significantly expand the airline’s pool of spare engines over the next two years, a move aimed at improving schedule reliability and insulating operations from ongoing supply chain headwinds that have impacted MRO turnaround times industry-wide.
The new engines will support the airline’s current fleet of 737 MAX 8-200 aircraft and the forthcoming 737 MAX-10s, which it hopes to be operating by 2027.
While Ryanair is known for lean operations and outsourcing much of its maintenance to third parties, recent moves suggest a pivot toward more self-reliance.
The low-cost carrier is in the midst of a significant internal investment push that includes not only spare parts provisioning but also physical infrastructure to support long-term growth.
‘Improving operational resilience’
“Today’s purchase of 30 new LEAP-1B spare engines is a significant $500m commitment to improve the operational resilience of our Group airlines.,” said Group CEO Michael O’Leary.
“These latest technology CFM engines reduce fuel consumption and CO2 emissions per seat by up to 20% when installed on our B737 MAX fleet, which will further widen Ryanair’s cost leadership over competitor airlines in Europe.”
Ryanair has been increasingly vocal about its desire to insource elements of its maintenance operations. In parallel with the engine acquisition, the airline is building a €40 million MRO hangar at Dublin Airport, its largest to date, which will support heavy maintenance on the expanding Boeing fleet.
That fleet is set to grow substantially: Ryanair expects to operate 300 737 MAX jets by 2027 and plans to grow to 800 aircraft by 2034, all powered by CFM engines.
By securing a larger pool of spare engines, Ryanair is not only buffering against potential maintenance bottlenecks but also creating greater flexibility across its group.
“This new agreement is another milestone in the long and successful partnership we have built with Ryanair. We look forward to continuing to support Ryanair’s significant growth by providing them with industry-leading reliability and utilization standards,” said CFM’s President & CEO, Gael Meheust.
The deal is also a clear signal that Ryanair intends to future-proof its operations at a time when parts shortages and shop visit delays continue to plague operators across the globe.
Ryanair’s engine investment is a hedge against MRO disruption
The aerospace engine industry has been significantly disrupted by recent global supply chain issues.
The intricate web of suppliers, ranging from raw material providers to manufacturers of precision parts, has faced bottlenecks at nearly every stage since Covid.
Lockdowns, labour shortages, and logistical challenges have delayed the delivery of crucial components like turbine blades, specialised alloys, and electronic control systems. These delays have directly impacted engine production timelines, forcing manufacturers to either slow down assembly lines or scramble to find alternative sources, often at higher costs.
The ripple effect extends to aircraft manufacturers, airlines, and defence programmes, all relying on a steady stream of new engines and spare parts to maintain operations.
One major consequence is the increased lead times for new engines and spare parts. Airlines, already grappling with fluctuating demand and tight budgets, are now facing longer wait times for essential components needed for maintenance and repairs.
This has led to grounded aircraft, canceled flights, and strained relationships between engine manufacturers and their airline customers.
The long-term implications of these supply chain disruptions on the aerospace engine industry are still unfolding.
The increased costs associated with sourcing materials, managing logistics, and developing alternative solutions will inevitably translate into higher engine prices and potentially impact the affordability of air travel.
Added to that, the industry is being forced to re-evaluate its reliance on just-in-time inventory management and embrace a more resilient supply chain model.
