Michael O’Leary has put a new target in his verbal crosshairs: Boeing.
Already in a perpetual war of words with the U.K. and Irish governments, as well as the European Commission, now O’Leary has decided to blast Boeing for not discounting aircraft enough as Ryanair looks for a top-up order of around 200 aircraft.
“I regret to report that we have made little progress in our discussions with Boeing for an order of 200 aircraft for delivery between 2013 and 2016,” O’Leary says in releasing half-year results. He warns that if Boeing doesn’t play ball by year-end, Ryanair will cancel and defer aircraft it has already committed to take.
“We won’t continue these discussions indefinitely,” O’Leary says. “We see no point in continuing to grow rapidly in a declining yield environment by passing on some of the enormous savings which Boeing has enjoyed both from suppliers and more efficient manufacturing in recent years.”
Tired of O’Leary antiques, Airbus already has said it’s not really interested in being a stalking horse for Ryanair in negotiating a lower price for airplanes, and has shown little interest in getting engaged in pursuing the 200 aircraft order O’Leary has repeatedly talked about.
O’Leary’s outburst raises a few questions, though, including the extent to which his current Boeing order actually allows his to defer aircraft without penalty.
What’s more, it raises the question whether O’Leary is merely using the aircraft talks as an excuse to curtail growth because the airline is running out of financially viable city-pairs to connect.
There could be one winner out of the spat if O’Leary follows through on his threat and that is shareholders. O’Leary says the airline may pay a dividend using the cash on hand that it would otherwise have used to pay for more 737s.
Boeing not so eager to get a large order: guess the requested price was really below/at cost...
Airbus not entusihastic about getting an order from a large Boeing only customer: guess they know that the selling price would be below/at cost...
Ryanair boss menaces without having a real alternative: at least an equivalent alternative. Will he go for Embraer / Canadair and go after smaller routes?