Ryanair’s long-running negotiation with Boeing for its largest narrowbody, the 737 MAX 10, has reached a stalemate. In a statement today, the European low-cost carrier indicated that Boeing would not lower its price by enough to satisfy Ryanair’s needs, and so it has pulled the plug on discussions.
MAX 10 negotiations are over
Europe’s biggest low-cost airline, Ryanair, has said today that it will no longer continue to negotiate with Boeing for the 737 MAX 10. The airline has been taking delivery of its MAX 8-200 aircraft since the type began arriving earlier this year but was keen to secure something slightly larger for its future fleet.
In a statement, CEO Michael O’Leary said,
“We are disappointed we couldn’t reach agreement with Boeing on a MAX10 order. However, Boeing have a more optimistic outlook on aircraft pricing than we do, and we have a disciplined track record of not paying high prices for aircraft.
“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.”
Ryanair has orders in for 210 MAX 8-200s which will be delivered from now until 2025. This will bring Ryanair’s total fleet to a size of more than 600 aircraft, with the capacity to fly 200 million passengers a year.
However, the airline had been discussing another order with Boeing for the 737 MAX 10 – the largest of Boeing’s new generation narrowbody. It was thought that the order would be for as many as 200 aircraft, but it seems that Boeing could not bring its price down to a level that would suit the low-cost airline.
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Airbus for Ryanair, or just a negotiating tactic?
Although the Ryanair statement throws some shade at Boeing, particularly in regards to the recent Airbus order secured from long-time Boeing customer Jet2, it’s unlikely the airline would ever really move camps. Since its inception, Ryanair has been dedicated to the 737 family and benefits from the efficiencies of operating a single fleet type in terms of everything from maintenance to pilot scheduling and more.
To move to Airbus would be completely outside of the strategy of Ryanair. It does have 29 A320-200s in the mix right now, acquired as part of the Lauda Europe deal. But Ryanair has made no secret of its desire to move back to an all-Boeing operation.
Making such a public and strongly worded statement regarding the end of negotiations is far more likely to be a tactic on the part of Ryanair to leverage some more discounts from Boeing. But the planemaker is sticking to its guns and is keen not to undersell its newest narrowbody aircraft.
A Boeing spokesperson told Simple Flying,
“Ryanair is a long-standing partner. We value their business and are committed to supporting them. At the same time, we continue to be disciplined and make decisions that make sense for our customers and our company.”
For now, it seems the negotiations have reached a stalemate, with neither side willing to back down on their target price. But Ryanair still wants to grow, and with so much invested in Boeing already, it would be the shock of the decade if it went anywhere else. For now, we’ll have to just wait and see.