Michael O’Leary, chief executive of Ryanair and one of Boeing’s biggest 737 customers, has said the US group appears “confused” over what to do with its best-selling narrowbody jet in response to the decision by Airbus to upgrade the engine of the rival A320.

The two aircraft makers’ dominance of the 100-200 seat segment, the biggest part of the commercial jet market, is coming to an end with at least three companies from China, Canada and Russia set to introduce rival offerings in the next five years.

That threat was hammered home on Tuesday when Ryanair, Europe’s largest low-cost airline, signed a co-operation agreement with China’s Comac. Under the deal, Ryanair will advise on the development of a 200-seat version of the company’s C919 aircraft, a 147-seat passenger jet, which is due to enter into service with Chinese airlines in 2016.