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Ryanair And 737MAX  
User currently offlineei737ng From Ireland, joined Feb 2007, 49 posts, RR: 0
Posted (2 years 8 months 3 weeks 5 days 13 hours ago) and read 8145 times:

Are FR in talks with Boeing on a large follow on order for 737's? I assume that any negotiations are for the 737 MAX?

11 replies: All unread, jump to last
 
User currently offlinePezySPU From Croatia, joined Dec 2011, 283 posts, RR: 0
Reply 1, posted (2 years 8 months 3 weeks 5 days 12 hours ago) and read 7977 times:

Probably, but unfortunately for FR, Boeing won't be as generous as the last time. FR had a look at C919 and MS21 (heck, even participated in the development of the C919), but I'm not sure how serious they were about those two aircraft.

User currently offlineStitch From United States of America, joined Jul 2005, 31059 posts, RR: 87
Reply 2, posted (2 years 8 months 3 weeks 5 days 6 hours ago) and read 7452 times:
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Quoting ei737ng (Thread starter):
Are FR in talks with Boeing on a large follow on order for 737's? I assume that any negotiations are for the 737 MAX?

FR is said to want to add another 200 or so 737NGs, but the hang-up is that FR wants more flexibility to re-sell them than Boeing has been willing to provide.


User currently offlineKC135TopBoom From United States of America, joined Jan 2005, 12150 posts, RR: 51
Reply 3, posted (2 years 8 months 3 weeks 5 days 4 hours ago) and read 6625 times:

I'll bet Boeing wishes FR would go to Airbus and buy the A-320NEO. Then again, I doubt Airbus wants this customer, either.

User currently offlinePezySPU From Croatia, joined Dec 2011, 283 posts, RR: 0
Reply 4, posted (2 years 8 months 3 weeks 5 days 3 hours ago) and read 6213 times:

Quoting KC135TopBoom (Reply 3):
Then again, I doubt Airbus wants this customer, either.

Yep, if I'm not mistaken, even Leahy confirmed that they don't want to do any business with FR himself.


User currently offline2175301 From United States of America, joined May 2007, 1072 posts, RR: 0
Reply 5, posted (2 years 8 months 3 weeks 5 days 2 hours ago) and read 5459 times:

Quoting PezySPU (Reply 4):
Yep, if I'm not mistaken, even Leahy confirmed that they don't want to do any business with FR himself.

I don't believe that is true. If I recall correctly from a post several years ago the quote from Airbus was to the effect that FR was free to order as many planes at list price as they wanted from Airbus.

Have a great day,


User currently offlinebj87 From Netherlands, joined Jun 2009, 448 posts, RR: 0
Reply 6, posted (2 years 8 months 3 weeks 5 days 2 hours ago) and read 5251 times:

Quoting 2175301 (Reply 5):
I don't believe that is true. If I recall correctly from a post several years ago the quote from Airbus was to the effect that FR was free to order as many planes at list price as they wanted from Airbus.

Correct I remember reading something like that in an article. While it doesn't inexplicably say that Airbus does not want to do business with FR in reality no one buys planes at list price. (well except some billionaires probably) Which in my opinion means that by making that statement Airbus is politely saying no interest.

FR did a great job negotiating the 737 deal. They got planes for cheap and basically kidnapped the Boeing 737 production line. Which in the end sucked for Boeing when 737 orders came in hot and fast at a later date.

FR's hardcore negotiating got them the deal they wanted but in the process they also, in my humble opinion, ruined his future negotiating position. If I remember correctly, don't quote me on this, FR once said they would never fly Airbus again. (They actually had one or two of them at one time.)

Airbus knows FR is a pain to deal with and therefore doesn't want the business. And whether you love or hate Airbus I think we can all agree Airbus' A320NEO will do just fine without FR clogging up the production line.

This basically gives FR 3 options
1) Buy from Airbus at list price.
2) Buy from Boeing, negotiations are going to be a lot less succesfull than last time
3) Buy C919 or MS21

Buying the C919 or MS21 could give them a good deal but isn't without risk. Part supply can be troublesome, especially in the beginning and because they we are talking about completely new and untested design reliability could be below standard, especially in the early stages which could reek havoc on FR's schedules and therefore costs.

Disclaimer: I am not stating that the C919 or MS21 will be unreliable aircraft. However reliability problems are much more likely on a new untested design from a new company in comparison to the A320 or B737 which are both fully matured aircraft from established aircraft manufacturers.

Quoting Stitch (Reply 2):
FR is said to want to add another 200 or so 737NGs, but the hang-up is that FR wants more flexibility to re-sell them than Boeing has been willing to provide.

I wasn't aware that an Aircraft manufacturers could implement restriction on the re-sell of their product. What kind of restrictions could there be? Just curious.


User currently offlineStitch From United States of America, joined Jul 2005, 31059 posts, RR: 87
Reply 7, posted (2 years 8 months 3 weeks 5 days 2 hours ago) and read 5201 times:
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Quoting bj87 (Reply 6):
I wasn't aware that an Aircraft manufacturers could implement restriction on the re-sell of their product. What kind of restrictions could there be? Just curious.

I imagine it's all based on the sales contract. As I understand it, because FR receives "most favored customer" pricing, they can turn around and sell one of their "slightly flown" 737NGs for a good bit less than Boeing can sell a new one and this has allowed FR to re-sell planes to customers who would otherwise have purchased new from Boeing.

I believe DL did the same with a number of their new 737-800s, taking delivery and then turning around and selling it to another party.


User currently offlinedfwrevolution From United States of America, joined Jan 2010, 978 posts, RR: 51
Reply 8, posted (2 years 8 months 3 weeks 5 days 1 hour ago) and read 5150 times:

Quoting KC135TopBoom (Reply 3):
I'll bet Boeing wishes FR would go to Airbus and buy the A-320NEO. Then again, I doubt Airbus wants this customer, either.

FR is a certainly challenging customer, but they are a customer nonetheless. I seriously doubt Boeing would rather not have FR as a major 737 operator.

Quoting bj87 (Reply 6):
I wasn't aware that an Aircraft manufacturers could implement restriction on the re-sell of their product. What kind of restrictions could there be? Just curious.

Among other things, the original manufacturer can refuse to support the aircraft if it is sold to another party outside of the agreed terms. They can also refuse to sell to the original customer in the future, which ruins their bargaining position with remaining suppliers.

Airbus made this threat when Boeing bought-back the A343s from SQ in the late-90s. I believe it was CX who eventually called Airbus' bluff and bought them. So is it really effective? Marginally.


User currently offlineHamlet69 From United States of America, joined Mar 2000, 2744 posts, RR: 58
Reply 9, posted (2 years 8 months 3 weeks 5 days 1 hour ago) and read 5077 times:

Quoting Stitch (Reply 2):
but the hang-up is that FR wants more flexibility to re-sell them than Boeing has been willing to provide.

That's one of the major stumbling blocks, but actually not the deal-buster. Boeing flat-out won't agree any deal if FR maintains a hardline on this one.

Quoting Stitch (Reply 7):
I believe DL did the same with a number of their new 737-800s, taking delivery and then turning around and selling it to another party.

They did - DL was selling them to a variety of lessors (CIT, BOC, etc.). But I believe in that case Boeing and DL had actually reached an agreement, because Boeing was prepping and delivering the frames directly for the lessors customers, although on paper they were still 'delivered' to DL.


Regards,

Hamlet69



Honor the warriors, not the war.
User currently offlineHamlet69 From United States of America, joined Mar 2000, 2744 posts, RR: 58
Reply 10, posted (2 years 8 months 3 weeks 5 days 1 hour ago) and read 5055 times:

Quoting Stitch (Reply 2):
but the hang-up is that FR wants more flexibility to re-sell them than Boeing has been willing to provide.

That's one of the major stumbling blocks, but actually not the deal-buster. Boeing flat-out won't agree any deal if FR maintains a hardline on this one.

Quoting Stitch (Reply 7):
I believe DL did the same with a number of their new 737-800s, taking delivery and then turning around and selling it to another party.

They did - DL was selling them to a variety of lessors (CIT, BOC, etc.). But I believe in that case Boeing and DL had actually reached an agreement, because Boeing was prepping and delivering the frames directly for the lessors customers, although on paper they were still 'delivered' to DL.


Regards,

Hamlet69



Honor the warriors, not the war.
User currently offlineei737ng From Ireland, joined Feb 2007, 49 posts, RR: 0
Reply 11, posted (2 years 8 months 3 weeks 3 days 3 hours ago) and read 1641 times:

Whether you like it or not, FR are the biggest 737 operator outside of the US. In context of their original order after 9/11 airlines worldwide were parking up aircraft, so when you have a customer aproaching Boeing with a large order with options, Boeing grabbed the order with both hands, worst case scenario it would help keep the 737 production line ticking over until an improvement in ecomonic conditions and open at a time when I assume alot of airlines were deferring delivery of a/c or Boeing was having to park up new a/c up in the desert. While FR got the deal of the century at the time, there are no longer major airlines in Europe with large Boeing narrow bodies fleets anymore (most European airlines fly Airbus narrow bodies) except FR. I still expect Boeing willing to do business with FR but its more on a level playing pitch now, where previously FR had Boeing over a barrell to a certain extent.

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