Ryanair and Boeing have ended negotiations on an order for the MAX 10s, citing a disagreement on the pricing of the aircraft. At least, that’s the official statement of the Irish low-cost carrier on September 6. More likely is that Michael O’Leary is playing hardball to bring Boeing back to the table. Is Ryanair really done with the MAX 10? We don’t know for sure, of course, but the Irish CEO has a reputation of negotiating hard and playing the media card to get his adversary on its knees. The list of airports Ryanair had threatened to leave if its conditions weren’t met is exhaustive. Often, the airline indeed kept its word but as often it backtracked only to return to an airport again a little later. On the failed MAX 10 negotiations, O’Leary says in a media statement: “We are disappointed we couldn’t reach an agreement with Boeing on a MAX 10 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.” And Ryanair isn’t alone in this: “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”. Jet2 announced an order for 36 A321neo’s last week with options on another 24. The UK leisure airline said it will get them at discount prices. Will Ryanair turn to Airbus now? Could Ryanair turn to Airbus then to fill its needs for future growth? That can’t be ruled out. O’Leary told Airinsight back in March 2019 that one of the reasons Ryanair purchased Laudamotion was that it is an Airbus operator. “We want to within the group have a large Boeing operation with Boeing sims, spares and engineers and somewhere else have Airbus aircraft, sims and things like that. We now have a fleet of Airbus and we will continue to grow it.” In 2019, O'Leary said that having a mixed Boeing-Airbus fleet thanks to Lauda made sense. (Lauda) We know that panned out differently, as Laudamotion has been reduced in size and a potential A320neo-family order went off the table quickly. But it could be that O’Leary indeed wants to become less dependent on a single aircraft supplier. He made his remarks in March 2019 four days before the second fatal MAX 8 accident that resulted in an 18-months grounding of the type which severely disrupted Ryanair’s growth plans. Betting on a single OEM has proved to be risky, which could make going the Airbus road a logical step. Ryanair still has a need for aircraft beyond 2026 From previous negotiating tactics, we shouldn’t be surprised that Ryanair is using Airbus just to put more pressure on Boeing. Negotiations on the MAX 10 have lasted for some ten months until they were stopped. This shows there is some keen interest in adding the largest MAX version to the fleet next to the 8200, of which the airline has 210 on order after buying another 75 last December. While O’Leary is right when he says that “we have a more than sufficient order pipeline to allow us to grow strongly over the next five 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”, O’Leary is always yearning for more. Note the wording “over the next five years.” Mind you that during the FY21-results presentation on May 17 (the same one when he slammed Boeing management…), he said that a MAX 10 order would be for deliveries between 2026 and 2030. Ryanair still has a need for aircraft beyond 2026. For fleet commonality, the MAX 10 would be the logical option. It could seat up to 230 passengers compared to 197 in the 8200, which would reduce seat costs even more. While the A321neo would have a better range, it could be more than Ryanair needs. O’Leary likely will have pushed Boeing as hard as he could “but the pricing isn’t right", he said in May and again today. With the demand for the MAX on the rise again, he could have lost his golden opportunity to get the MAX 10 when prices were rock bottom and gambled on a further decrease that didn’t happen. Instead of pushing on, O’Leary and Boeing have decided “to waste no more time in these negotiations”. Let’s wait and see who will be the first to blink again. By the way, it makes us wonder how International Airlines Group (IAG) is doing with its Letter of Intent for up to 200 MAX aircraft that was announced during the 2019 Paris Airshow. IAG hasn’t offered any updates on that during its last results webcast.
