What is Boeing’s MAX 10 and why doesn’t Ryanair do it (or doesn’t)?

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Commercial aerospace giant

Boeing

you may have a new problem: the Airbus A321.

Ryanair

(marker: RYA. Ireland), CEO Michael O’Leary fired

Boeing

(BA) after the couple failed to reach an agreement on an order for 737 MAX 10 due to pricing.

We have a disciplined track record of not paying high prices for aircraft, the CEO said in a statement.

We don’t share Boeing’s optimistic price prospects, he said, though that may explain why in recent weeks others [Boeing customers] have been placing new orders in

Airbus,

instead of Boeing.

Boeing shares fell about 2.5% in midday trading. He

S&P 500

i

Dow Jones industrial average

they fall by approximately 0.4% and 0.8%, respectively.

Ryanair

is a longtime partner, the Boeing spokesman said De Barron, although it did not address prices. We value your business and are committed to supporting you. At the same time, we continue to be disciplined and make decisions that make sense to our customers and our company.

Ryanair operates more than 450 Model 737 and 29 aircraft

Airbus

(AIR. France) Airplane A320. The 737 and A320 are similar in size and compete with each other.

The 737 MAX 10 is not yet flying commercially. It is the stretch, or longer version, of the MAX, which measures 144 feet long, about 30 feet longer than the shorter version. The extra length means more passengers. A MAX 10 has a capacity for 230 people; the shorter version has about 170 seats.

The longer version of a jet family always has the best operating costs.

Stretching a family plane will always end up with the airline’s preferred version, said Robert Spingarn, an analyst at Credit Suisse. That’s why right now the A321 is more attractive than the A320.

The A321 NEO is the longest version of an A320. It is about 146 feet long and will compete with the MAX 10. Deliveries of the A321 began in late 2019.

The first flight of the MAX 10 was earlier this year and Boeing expects it to enter service in 2023.

United Airlines

(UAL) has requested MAX 10 aircraft.

Of course, O’Leary could be playing hardball after Boeing’s tough years. The MAX was established worldwide between March 2019 and November 2020 after two fatal accidents in five months. And O’Leary has talked brilliantly about MAX planes in the past. But it seems that prices always appear.

Our new Boeing 737 Gamechanger aircraft will reduce the cost of our fleet and unit costs, thanks to the very attractive prices we negotiated with Boeing, O’Leary said in a June conference call. Gamechanger is how O’Leary refers to the MAX. These aircraft in this fleet will reduce our unit costs for the next decade, the CEO added.

Price negotiations can be tough, and at the moment, it looks like Ryanair is the one dealing from a position of strength.

By the time of trading on Tuesday, Boeing shares have risen just 2% so far this year. The company is digging into the double issues of grounding 737 MAX and the global pandemic that has affected air travel demand.

Write to Al Root at [email protected]