Ryanair talks with Boeing Collapse over 737 Max Price Tag

Ryanair talks with Boeing Collapse over 737 Max Price Tag Disagreement

Ryanair talks with Boeing Collapse over 737 Max Price Tag

Ryanair and Boeing have ended negotiations on a significant new order of Boeing 737 aircraft due to a dispute over pricing. The Irish airline announced Monday that Ryanair had stopped talks with Boeing.

With 210 orders for the 197-seat MAX 8-202 model, the budget-giant is the biggest European customer of the 737 MAX. The company has indicated that it may order 250 MAX 10 seats for delivery in 2025.

Ryanair’s large order would be a huge boost for U.S. planemaker Boeing. Its MAX was downgraded from 20 to 21 months last November after two deadly crashes. This would be a boost for an industry struggling with the Covid-19 epidemic.

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Ryanair Group CEO Michael O’Leary said last week that he was skeptical about the prospects of an immediate deal and expressed surprise at any agreement reached by next year.

He stated Monday that talks on price had failed to reach an agreement.

O’Leary stated in a statement that “we are disappointed” they couldn’t agree.

Boeing has a better outlook than us on pricing aircraft, and they have a track record of paying low prices.”

Boeing didn’t immediately reply to our request for comment.

Ryanair didn’t say that it would be negotiating with Airbus as the best alternative.

O’Leary, one of Boeing’s most loyal customers, in recent years has repeatedly played down the prospect of a deal with Airbus due to the manufacturer’s heavy backlog of orders.

Pricing Outlook

O’Leary made reference to Monday’s fact that Airbus had also been a customer of Boeing.

Last week, Jet2 in Britain closed a deal to purchase 36 A321neo aircraft for about $4.9billion.. Delta added 30 A321neo narrowbody aircrafts to its order books with Airbus last August.

O’Leary stated that Boeing’s optimistic pricing outlook may be the reason why other large Boeing customers, such as Delta or Jet2, placed new orders with Airbus in recent weeks. Delta owns a mix of Airbus- and Boeing jets.

Industry analysts noted Boeing has nonetheless had a series of major orders for the MAX in recent months including 150 of the 737 MAX-10 from U.S. carrier United Airlines.

Some analysts say the public standoff suggests that recent orders have given Boeing increased confidence to defend a red line on pricing as the MAX regains commercial momentum.

This contrasts with the MAX’s reported aggressive pricing six months back.

Ryanair is betting that its supplier will offer a better deal as the MAX crisis continues to pressure Ryanair.

The outcome of the price war will be influenced in part by the pace of the efforts to stop Covid-19 over the next few months.

A senior industry source stated that, despite the controversy between Ryanair and Boeing, it was likely they would eventually reach a settlement.

Reporting by Conor Humphries, Editing by Edmund Blair, Jane Merriman

Conor Humphries and Tim Hepher from Reuters wrote this article and were legally licensed by Industry Dive. Please direct all licensing questions to [email protected]

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Publiated Mon, 06 Sep 2021 at 17:03:23 (+0000).

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