© Reuters. From file: A Ryanair Boeing 737-8AS takes off from Riga International Airport in Latvia on July 21, 2022. REUTERS/Ents Kalinins
Written by Tim Hever
PARIS (Reuters) – Ireland’s Ryanair is preparing to bury the hatchet with its exclusive supplier and place a multibillion-dollar order for Boeing (NYSE:) planes on Wednesday, ending an 18-month row over pricing.
Boeing said it would make a “big announcement” at 1300 GMT, but gave no other details. Ryanair declined to comment.
On Monday, Reuters first reported that Europe’s largest low-cost carrier Ryanair, which is looking for as many as 200 more Boeing 737s to secure the next phase of its growth, was close to a big deal for a triple-digit number of aircraft early in the year. Tuesday.
Such a deal would be a long-awaited truce between Boeing and Ryanair, whose outspoken chief executive Michael O’Leary last year halted talks and issued a barrage of criticism over pricing and delays in the arrival of pre-ordered planes.
“There’s only one airline in the world willing and able to buy Boeings and they can’t seem to find us,” O’Leary told reporters last March as he scouted used aircraft instead.
Boeing, which does not usually comment on customer negotiations, said at the time it appreciated Ryanair’s business but pledged to remain “disciplined” about pricing.
Ryanair exclusively uses Boeing 737s for its main fleet and is one of Boeing’s largest customers with more than 600 aircraft in its fleet or on order, according to its website.
Once the dust settles from the latest rhetoric, analysts said, all eyes will be on indications of whether Ryanair has managed to pay less per seat than previous requests.
The 737 MAX is selling for up to $131 million at list prices but typical discounts are up to more than 50% and final pricing details are confidential.
Industry sources say Ryanair has in the past been able to negotiate a special clause guaranteeing the lowest fares in its region — one of the few airlines able to benefit from such a treatment along with Southwest Airlines (NYSE:).
But the relationship between Ryanair and Boeing has cooled in the wake of the pandemic as low-cost airlines expand into the markets.
Despite O’Leary’s tough stance, industry sources said Ryanair lost some advantage in the negotiations as other airlines including United Airlines stepped up with large orders for the MAX 10.
“Ryanair operates a fleet of 737s and is pretty much locked up,” said Ryanair analyst Nick Cunningham, with Airbus planes sold for years and China years away to supply to the West.
Still, the deal could provide a boost for the largest version of the Boeing 737 Max, a series whose deliveries have been affected by a two-year safety crisis and post-coronavirus disruption.
O’Leary has expressed interest in the 230-seat MAX 10, which has yet to be certified. But he has vowed to pay no more than 30 more seats, telling Reuters in March that he is also considering more orders for the 200-seat 737 Max 8200.
(This story has been corrected to set the announcement time at 1300 GMT and not 1400 GMT in paragraph 2)