Ryanair CEO Says it Got Good Deal on Boeing Jets Despite no No Airbus Talks
Ryanair CEO Michael O’Leary
Flamboyant Ryanair CEO Michael O’Leary said his airline got a discounted price on their 175 737 jet order from Boeing that was very similar in price to the deal they got in 2005.
“The pricing is not dissimilar from our last order in 2005,” Mr. O’Leary said. “This is because of our need to grow in Europe and because Boeing wanted a big order–the pricing reflects that neither of us got it all our own way,” he added.
O’Leary also said that although Ryanair had ‘discussions’ with French plane maker Airbus, he seemed to indicate that Airbus was in no hurry to cut a deal.
‘Mr. O’Leary said despite no substantive parallel negotiations with Airbus, a unit of European Aeronautic Defence & Space Co.(EAD.FR), about ordering equivalent planes, Ryanair’s order was big enough for it to exert some pressure on its sole aircraft supplier.
‘[Airbus] was busy getting orders from elsewhere and didn’t need Ryanair so “the price would reflect that.”‘
O’Leary wouldn’t disclose the price of the mammoth order announced today, but at list prices their order is worth $15.6 Billion.
‘Airlines can get discounts of as much as 50% for big orders. In November, Mr. O’Leary had said that a deal would be struck when the “price is right.”‘
Airbus landed a huge order with Indonesian carrier Lion Air for 234 A320 jets, the airline’s first ever order with Airbus. Lion Air until the announcement operated an all-Boeing fleet. The Lion Air order did not make Boeing happy according to some pundits.
Ryanair is evaluating Boeing’s Next Generation 737 MAX aircraft even though Mr. O’Leary has said the carrier prefers the lighter 737-800 version of the aircraft because it incurs lower charges at airports within the European Union. The MAX version of Boeing’s 737 workhorse is due to enter service in 2017.