Ryanair says it is ending talks with Boeing by order of large planes

DUBLIN, Sept. 6 (Reuters) – Ryanair (RYA.I) has ended talks with Boeing (BA.N) over a major new order for Boeing 737 aircraft due to a price disagreement, the Irish airline.

The budget giant is already the largest European customer of the 737 MAX, with 210 firm orders of the 197-seat MAX 8-200 model. He said up to 250 of the 230-seat MAX 10 could be ordered to be delivered by 2025.

A large order from Ryanair would provide a major boost to US planner Boeing and its MAX, which was on the ground for 20 months, until last November, after two fatal crashes. It would also drive an industry facing the COVID-19 pandemic.

Last week, Ryanair Group CEO Michael O’Leary poured cold water on the chances of a quick deal, saying he would be surprised if an agreement was reached before next year. Read more

On Monday, he said talks had collapsed without any price agreement.

“We are disappointed that we have not been able to reach an agreement,” O’Leary said in a statement.

“However, Boeing has a more optimistic view of the price of aircraft than we do, and we have a disciplined track record of not paying high prices for the aircraft.”

Boeing did not immediately respond to a request for comment.

The breakdown of negotiations, at least for now, means there will be no quick deal that would have meant a big vote of confidence in the MAX, but Ryanair did not say it planned to hold talks with rival Airbus (AIR.PA), the only realistic alternative provider.

O’Leary, one of Boeing’s most loyal customers, has in recent years repeatedly downplayed the possibility of a deal with Airbus due to the manufacturer’s strong backlog of orders.

PRICE FORECAST

In Monday’s statement, O’Leary referred to the fact that other Boeing customers had made deals with Airbus.

The British Jet2 (JET2.L) last week closed a deal for 36 neo A321 aircraft worth about $ 4.9 billion. Read more. Delta (DAL.N) added 30 A321neo narrow-body aircraft to its Airbus order book in August.

Boeing’s more optimistic price prospects “may explain why in recent weeks other large Boeing customers, such as Delta and Jet2, have been placing new orders on Airbus,” O’Leary said. Delta has a mixed fleet of Airbus and Boeing aircraft.

Industry analysts noted that Boeing has had a number of major orders for the MAX in recent months, including 150 of the 737 MAX-10 from the US company United Airlines (UAL.O).

Some analysts say the public disagreement suggests that recent orders have given Boeing greater confidence to defend a red line in prices as the MAX regains commercial momentum.

This contrasts with the pattern seen about six months ago when the MAX was reportedly available at aggressive prices.

Ryanair, on the other hand, is betting that its supplier will come to the table with a better offer, as continued pressure from the pandemic adds to the aftermath of the MAX crisis.

The development of the tug of war on prices will depend in part on the progress of efforts to contain COVID-19 in the coming months.

Despite the public outcry, “Boeing and Ryanair are likely to end up in a deal,” an industry source said.

Conor Humphries Reports; Edited by Edmund Blair and Jane Merriman

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