Michael O’Leary, chief of Ryanair has lashed out at Boeing calling the US planemaker “delusionary”
for imposing what he terms a double-digit percentage price hike for 737 MAX 10 jets
in talks earlier this year.
Chief executive, Mr. O’Leary said Boeing needed to “get its shit together” referencing
what he said were delays in the delivery of 65 aircraft from an existing MAX order.
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And in today's video, we are going to discuss “Why Ryanair Hate Boeing!”
So without any further ado, Let's begin.
The budget carrier is Boeing’s biggest client in Europe, with a firm commitment to buy 737
Max 8-200 narrow-body aircraft worth over $20 billion in total.
But that doesn't mean they're on the greatest of terms.
The two sides had recently been in talks for a follow-up order before Boeing walked away
in September after the two couldn’t agree on terms.
On Monday, O'Leary decided to dedicate part of the company's latest financial report to
an update on the state of negotiations, and it was, in keeping with O'Leary's style, full
of colorful quotes.
“Boeing is losing customers all over the place,” he said in prerecorded comments
to investors following its fiscal second-quarter results through the end of September.
The spread of COVID-19 variants and public acceptance of the MAX will help determine
whether prices have further room to fall or whether Ryanair, one the industry’s toughest
negotiators, has missed the bottom of the market for the largest MAX model.
“MAX values have increased very slightly as inventory declines,” said Rob Morris,
chief consultant at Ascend by Cirium.
“We are hearing less about some of the low prices.”
The MAX 10 has yet to enter service but estimated values for the slightly smaller MAX 9 have
risen 2% recently, though are still 9-10% below levels before the MAX crisis, he said.
Ryanair and Boeing have been in discussions about a large follow on order for Boeing MAX10
aircraft over the past 10 months.
However, last week it became clear that the pricing gap between the partners could not
be closed and accordingly, both sides have agreed to waste no more time on these negotiations.
“We are disappointed we couldn’t reach an agreement with Boeing on a MAX10 order.
However, Boeing has a more optimistic outlook on aircraft pricing than we do, and we have
a disciplined track record of not paying high prices for aircraft,” Ryanair’s Michael
O’Leary said.
“We have a more than sufficient order pipeline to allow us to grow strongly over the next
5 years with a Boeing 737 fleet, which will rise to over 600 aircraft and will enable
Ryanair to capitalize on the extraordinary growth opportunities that are emerging all
over Europe as the Continent recovers from the Covid pandemic.
We do not share Boeing’s optimistic pricing outlook, although this may explain why in
recent weeks other large Boeing customers such as Delta and Jet2, have been placing
new orders with Airbus, rather than Boeing”.
The 737 Max was grounded for 20 months after two fatal crashes that killed 346 people.
In December, just a few weeks after the Federal Aviation Administration cleared the plane
to resume carrying passengers, Ryanair announced one of the largest orders for the jet when
it agreed to add 75 planes to its existing order of 135 aircraft.
It took deliveries of its first 12 737 Max jets this past summer.
"Ryanair's board and people are confident that our customers will love these new aircraft.
And, most of all, our customers will love the lower fares, which these aircraft will
enable Ryanair to offer for the next decade," the Irish airline said at that time.
Ryanair was also upfront that it expected to place an even bigger order for the next
generation of the plane, the Max 10, once it is approved by the FAA.
Boeing expects to start deliveries of the Max 10 in 2023.
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