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Last Ryanair 737NG Delivered  
User currently offlinePH-BFA From Netherlands, joined Apr 2002, 562 posts, RR: 1
Posted (1 year 7 months 5 days 23 hours ago) and read 16903 times:

According to this website, Ryanair took delivery of ei-evy yesterday, the latest (and currently last) 737 on order.

http://www.planespotters.net/Product...oeing/737/40319,EI-EVY-Ryanair.php

Would this mean that for the next couple of years we won't see any new aircraft deliveries for Ryanair as they did not place any orders yet?

38 replies: All unread, showing first 25:
 
User currently offlineChiad From Norway, joined May 2006, 1130 posts, RR: 0
Reply 1, posted (1 year 7 months 5 days 22 hours ago) and read 16632 times:

What about all their growth plans?
I think this is the result that neither Boeing nor Airbus is very "willing" to lower their prices for this bully of an airline.


User currently offlinetistpaa727 From United States of America, joined May 2007, 324 posts, RR: 2
Reply 2, posted (1 year 7 months 5 days 22 hours ago) and read 16583 times:

With no new deliveries on the horizon doesn't that go against their business plan - retire planes quickly to keep a very young fleet that requires less maintenance? It might appear the bullying tactic just might bite O'Leary in the rear...


Don't sweat the little things.
User currently offlineCRJ900 From Norway, joined Jun 2004, 2171 posts, RR: 1
Reply 3, posted (1 year 7 months 5 days 22 hours ago) and read 16477 times:
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Isn't 300 aircraft enough? They are parking shitloads of aircraft during winter, and if they are desperate for lift during summer, they can probably lease some extra frames - other airlines do.


Come, fly the prevailing winds with me
User currently onlineSKAirbus From Norway, joined Oct 2007, 1666 posts, RR: 2
Reply 4, posted (1 year 7 months 5 days 22 hours ago) and read 16395 times:

Quoting CRJ900 (Reply 3):
Isn't 300 aircraft enough? They are parking shitloads of aircraft during winter, and if they are desperate for lift during summer, they can probably lease some extra frames - other airlines do.

I think Ryanair is reaching the end of its growth potential. Newer, more innovative airlines are growing and appearing offering a LCC product that can be better tailored. Look at Norwegian... they have had astonishing growth and with a very different product.



Next Flights: LGW-SVG (738-DY), SVG-LHR (319-BA), LHR-HKG (388-BA), HKG-SYD (333-CX), SYD-HKG (333-CX), HKG-LHR (388-BA)
User currently offlineChiad From Norway, joined May 2006, 1130 posts, RR: 0
Reply 5, posted (1 year 7 months 5 days 21 hours ago) and read 16330 times:

Quoting CRJ900 (Reply 3):
Isn't 300 aircraft enough? They are parking shitloads of aircraft during winter, and if they are desperate for lift during summer, they can probably lease some extra frames - other airlines do.

That's true and probably what they'll have to do.
But this didn't seem to be their strategy some time back.

http://blog.seattlepi.com/northwestf...02/05/airbus-no-deal-with-ryanair/

http://www.ryanair.com/en/news/ryana...ons-have-terminated-unsuccessfully

http://www.reuters.com/article/2009/...anair-boeing-idUSGEE5B70YY20091208

[Edited 2012-12-18 05:59:35]

User currently offlineStitch From United States of America, joined Jul 2005, 30524 posts, RR: 84
Reply 6, posted (1 year 7 months 5 days 21 hours ago) and read 16069 times:
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Quoting PH-BFA (Thread starter):
Would this mean that for the next couple of years we won't see any new aircraft deliveries for Ryanair as they did not place any orders yet?

Boeing may be holding 737 delivery positions for them. The two have been negotiating a ~200-frame purchase for some time.



Quoting Chiad (Reply 1):
What about all their growth plans?

There has been speculation that FR wants to slow their growth and therefore have been husbanding cash by not placing additional orders. Their fleet is still quite young (5% are between 9 and 10 years old) so they don't need to start replacing them in the near future.

Quoting tistpaa727 (Reply 2):
With no new deliveries on the horizon doesn't that go against their business plan - retire planes quickly to keep a very young fleet that requires less maintenance?
Quoting Chiad (Reply 1):
I think this is the result that neither Boeing nor Airbus is very "willing" to lower their prices for this bully of an airline.

Per statements from Boeing, they are comfortable with the pricing FR is asking for. What they are not comfortable with is FR's desire to be able to quickly re-sell their planes.


User currently offlineBongodog1964 From United Kingdom, joined Oct 2006, 3534 posts, RR: 3
Reply 7, posted (1 year 7 months 5 days 20 hours ago) and read 15792 times:

Quoting tistpaa727 (Reply 2):
With no new deliveries on the horizon doesn't that go against their business plan - retire planes quickly to keep a very young fleet that requires less maintenance? It might appear the bullying tactic just might bite O'Leary in the rear...

Whilst this has been the FR business plan it was entirely dictated by the prices they got for new aircraft back in 2001. It made sense to keep replacing nearly new aircraft when 2nd hand prices are high and the cost of replacements low. Now that the supply of cheap new aircraft has come to an end it might make financial sense to keep them longer.


User currently offlinetdscanuck From Canada, joined Jan 2006, 12709 posts, RR: 80
Reply 8, posted (1 year 7 months 5 days 20 hours ago) and read 15599 times:

Quoting tistpaa727 (Reply 2):
With no new deliveries on the horizon doesn't that go against their business plan - retire planes quickly to keep a very young fleet that requires less maintenance?

As Bongodog1964 said, it's only in the business *because* of the deal they got. It's not really a necessary part of Ryanair's business plan (the plan works either way). Ryanair paid so little for new frames that they could put them into the used market prior to heavy maintenance and come out ahead. That probably won't be true going forward but it doesn't really cause any issue with their business plan, it just means they'll keep the planes through their heavy checks. They're perfectly serviceable.

Tom.


User currently offlinePH-BFA From Netherlands, joined Apr 2002, 562 posts, RR: 1
Reply 9, posted (1 year 7 months 5 days 19 hours ago) and read 15507 times:

Quoting tdscanuck (Reply 8):
it doesn't really cause any issue with their business plan

Having more ' heavy checks' in the future does raise their cost base I would say, which would imply that either other costs have to come down, or more income has to be generated (higher ticket prices, more ancilliary revenues, higher load factors etc) in order to achieve the same level of (operational) profitability


User currently offlineJoeCanuck From Canada, joined Dec 2005, 5398 posts, RR: 30
Reply 10, posted (1 year 7 months 5 days 18 hours ago) and read 14621 times:

Quoting PH-BFA (Reply 9):
Having more ' heavy checks' in the future does raise their cost base

Heavy checks are still cheaper than buying new aircraft. It's not like they'd be swapping MD's for NG's...they'd be swapping NG's for NG's...so the operating cost would be about the same anyway. It's not until NEO's or MAX's are available, (or C919's), that it really makes sense to refresh the fleet.



What the...?
User currently onlinelapper From United Kingdom, joined Mar 2002, 1563 posts, RR: 7
Reply 11, posted (1 year 7 months 5 days 18 hours ago) and read 14081 times:

Quoting Stitch (Reply 6):
Their fleet is still quite young (5% are between 9 and 10 years old) so they don't need to start replacing them in the near future.

Don't forget that although the fleet is you, the number of cycles will be quite high for the age. Ryanair flies approx 6-8 sectors per day, much higher utilisation than other carriers.


User currently offlineStitch From United States of America, joined Jul 2005, 30524 posts, RR: 84
Reply 12, posted (1 year 7 months 5 days 17 hours ago) and read 13544 times:
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Quoting lapper (Reply 11):
Don't forget that although the fleet is you, the number of cycles will be quite high for the age. Ryanair flies approx 6-8 sectors per day, much higher utilisation than other carriers.

True, however a 737NG is designed for such heavy use.



Since the start of 2010, Boeing has secured orders for over 800 737-800s. If may very well be the case that RyanAir is not finding a ready market for their used 737-800s so even if they have come to an agreement with Boeing on pricing and terms, they can't shift their old planes so they're forced to hold on to them.


User currently offlineskipness1E From United Kingdom, joined Aug 2007, 3196 posts, RR: 1
Reply 13, posted (1 year 7 months 5 days 17 hours ago) and read 13467 times:

The number of cycles isn't nearly as high in winter, much of the fleet is parked for days at a time. An they STILL make millions!

User currently offlineDocLightning From United States of America, joined Nov 2005, 19369 posts, RR: 58
Reply 14, posted (1 year 7 months 5 days 17 hours ago) and read 13294 times:

Quoting Stitch (Reply 6):
Per statements from Boeing, they are comfortable with the pricing FR is asking for. What they are not comfortable with is FR's desire to be able to quickly re-sell their planes.

What difference would that make to Boeing?


User currently offlineredzeppelin From United States of America, joined Feb 2012, 545 posts, RR: 0
Reply 15, posted (1 year 7 months 5 days 17 hours ago) and read 12948 times:

Quoting DocLightning (Reply 14):
What difference would that make to Boeing?

This is how I see it: Boeing makes more money when they can sell new frames directly to the airlines that buy the used frames from FR. FR is able to get good discounts by ordering in large numbers, while smaller airlines can't negotiate the same discounts. So boeing makes more money per frame when selling to the smaller airlines. Does that make sense?

If FR resells large numbers of their relatively young used 738s at reasonable prices, it affects Boeing's ability to sell new frames to those same buyers. FR would presumably buy new planes to replace them with, but Boeing would prefer to sell new frames directly to a diverse customer base rather than selling to one major (and somewhat unpredictable) buyer that demands low prices and then turns around and resells the planes after a few yers.



Happiness is rediscovering a forgotten L-1011 in your flight log.
User currently offlineEagleBoy From Niue, joined Dec 2009, 1794 posts, RR: 2
Reply 16, posted (1 year 7 months 5 days 17 hours ago) and read 12853 times:
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Quoting skipness1E (Reply 13):

The number of cycles isn't nearly as high in winter, much of the fleet is parked for days at a time. An they STILL make millions!

Well FR often have a no parking charges deal with an airport, flight/cabin crew are contractors, handling agents are 3rd party. So FR don't lose money 'parking' those airframes as they would be flying empty or close to anyway.


User currently offlineflyingcello From United Kingdom, joined Jul 2010, 139 posts, RR: 0
Reply 17, posted (1 year 7 months 5 days 17 hours ago) and read 12743 times:

Quoting DocLightning (Reply 14):
What difference would that make to Boeing?

redzeppelin has it right...Ryanair putting lots of nearly new frames onto the second hand market supresses prices through oversupply. And this impacts Boeing's ability to command high prices for new aircraft.

A good illustration is that of the BMW car fleet that was supplied for the London Olympics. BMW provided 5000 cars, and all were placed onto the second hand market after the Olympics. In order not to impact second hand (or brand new) prices, BMW UK held onto a similar number of BMW Fleet cars (management, press etc.) for longer than they usually would (probably nine months to a year rather than six months or something similar). This ensured that the Olympic cars didn't damage resale value.


User currently offlineStitch From United States of America, joined Jul 2005, 30524 posts, RR: 84
Reply 18, posted (1 year 7 months 5 days 16 hours ago) and read 12266 times:
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Quoting DocLightning (Reply 14):
What difference would that make to Boeing?

FR paid around $29 million each for the 100 737-800s they ordered in January 2002. Most of those planes were delivered between 2003 and 2007.

Those 2003 deliveries had an average market value of $38 million after five years. A new 737-800 would run a smaller customer about $48 million, so they could save millions by taking one of FR's used frames and FR could sell that frame for more than they paid for it. As redzeppelin noted, that directly impacted Boeing's ability to sell new 737s to smaller customers.

And it's not just RyanAir. For a time in the late 2000s, Delta Airlines was taking deliveries of new 737-800s from Boeing Field and immediately re-selling them for a profit to secondary buyers thanks to the pricing deals they had in place with Boeing.


User currently offlineFriendlySkies From United States of America, joined Aug 2004, 4105 posts, RR: 5
Reply 19, posted (1 year 7 months 5 days 16 hours ago) and read 11980 times:

Quoting Stitch (Reply 18):
And it's not just RyanAir. For a time in the late 2000s, Delta Airlines was taking deliveries of new 737-800s from Boeing Field and immediately re-selling them for a profit to secondary buyers thanks to the pricing deals they had in place with Boeing.

I'm not a lawyer, but shouldn't there be some sort of legal issue with this practice? I'm surprised Boeing (and Airbus) wouldn't have some sort of language in their contracts, unless they were that desperate for orders back then.


User currently offlineLHCVG From United States of America, joined May 2009, 1541 posts, RR: 1
Reply 20, posted (1 year 7 months 5 days 15 hours ago) and read 11582 times:

Quoting FriendlySkies (Reply 19):

I'm not a lawyer, but shouldn't there be some sort of legal issue with this practice? I'm surprised Boeing (and Airbus) wouldn't have some sort of language in their contracts, unless they were that desperate for orders back then.

I wouldn't make a habit of that over the long term, as the company would likely be less willing to make tasty deals with you in the future knowing you will do that to them, but there isn't a legal issue in selling planes delivered according to a previously agreed-to delivery contract.

Remember that with something like airplanes there is a very significant time value to the asset. Delivery slots themselves can be just as valuable (if not more) than the plane itself - see recent A330 orders. There is only so much Boeing can do to speed up delivery even for it's best customer (see what AA ended up doing). Also, it's always possible they even gave tacit approval for such an arrangement if it kept someone in their camp who otherwise would have bought Airbii, and if (say) DL were threatening to drop the orders for financial reasons. I don't know the specifics; I'm just throwing a few considerations out there to point out how Boeing might not be too opposed given the specific arrangement.


User currently offlineStitch From United States of America, joined Jul 2005, 30524 posts, RR: 84
Reply 21, posted (1 year 7 months 5 days 15 hours ago) and read 11223 times:
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Quoting FriendlySkies (Reply 19):
I'm surprised Boeing (and Airbus) wouldn't have some sort of language in their contracts...

They do now, which is one of the hang-ups to FR placing a new order.


User currently offlineyyz717 From Canada, joined Sep 2001, 16245 posts, RR: 56
Reply 22, posted (1 year 7 months 5 days 14 hours ago) and read 10633 times:

Quoting SKAirbus (Reply 4):
I think Ryanair is reaching the end of its growth potential.

I agree. Their unit costs will also rise as wage pressures from a maturing (ie. more tenured) work force grow. Over time, mx costs on the 738 fleet will start to rise.

Ryanair's model is based on low costs AND fast growth to keep unit costs in check. The model now appears to need changing.



Panam, TWA, Ansett, Eastern.......AC next? Might be good for Canada.
User currently offlinecipango From Ireland, joined exactly 5 years ago today! , 581 posts, RR: 0
Reply 23, posted (1 year 7 months 5 days 8 hours ago) and read 7667 times:

The OCD in me is dying at the fact they didn't end at EI-EVZ  


Next Flights: DUB-KEF-DUB, DUB-DXB-MEL-DXB-DUB, DUB-MAN-DME-MAN-DUB, DUB-CDG-KUL-CAN-HKG-KUL-CDG-DUB
User currently offlineHAWK21M From India, joined Jan 2001, 31667 posts, RR: 56
Reply 24, posted (1 year 7 months 5 days 4 hours ago) and read 6439 times:

Quoting PH-BFA (Thread starter):
Would this mean that for the next couple of years we won't see any new aircraft deliveries for Ryanair as they did not place any orders yet

No 737MAX. for them.



Think of the brighter side!
25 InsideMan : as fas as I know Ryanair made the money at delivery, not reselling the A/C through sale & lease back at time of delivery. E.g. A/C Price 25M$ net
26 HAWK21M : On this sale and lease back topic.....if it favours the Airlines.....what is the counterside to it. Also how does the bank benefit.Who loses.
27 FlyingAY : You have to remember that Ryanair bought their planes at a time when Boeing was desperate for 737 orders to keep the production line rolling. MOL's i
28 Post contains images PanHAM : While we are talking about it, why is the FR 738 max to weight 69990 kgs whereas most other carriers list 78245 kgs? Does that give them any additiona
29 Post contains links PH-BFA : Could cost them 50 million euros.. http://www.spiegel.de/reise/aktuell/...en-erschummelt-haben-a-873756.html
30 InsideMan : noone really loses. Boeing is having a big order with low margin, still the production is full, planes are sold at a profit (albeit low one), Ryanair
31 SmittyOne : Wow, I read a Google translation of that article...is the allegation that Ryanair inappropriately understated the MTOW of their aircraft in order to
32 PanHAM : even better, the bank bundles that into derivates or similar products and sells these straight away. If there is a default, not the bank loses, the i
33 tdscanuck : Ryanair doesn't fly far enough to ever need the full weight. They save a lot by reducing the MTOW because that's what many airports use to figure out
34 SmittyOne : Thanks Tom, makes sense to me...
35 7BOEING7 : Let's keep this in perspective--the vast majority of Ryainair's fleet is not leased (less than 20%)--so that's not responsible for the majority of th
36 DouglasDC10 : Ryanair makes use of so-called "flex weights" which means that an individual aircraft is certified for different MTOWs. Ryanair's 737-800s are certif
37 skipness1E : So was every single B737-8AS delivered to DUB? I know EZY deliver to several bases from Airbus.
38 PanHAM : FR buy a products from a third country, which has to go through customs procedure, whereas EZY buys a product from another single market country whic
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