artsyman
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Effect Of Ryanair Deal On Easyjet Deal?

Fri Jan 25, 2002 1:55 am

Hey Folks, With the news that Ryanair have done what must be called a substancial deal with Boeing, how do you see this playing out for Easyjet in their quest for new planes. Some of the things to consider could be:

A) Does Airbus improve it's terms on what it offered Ryanair in order to try to lure Easyjet ?

b) Due to the heavy competition between Ryanair and Easyjet, I wonder if easyjet will feel pressed to a large order in a saving face way, as if they only order 15 planes etc, it will make Ryanair's growth look more solid.

Discuss...

Jer
 
Guest

RE: Effect Of Ryanair Deal On Easyjet Deal?

Fri Jan 25, 2002 2:36 am

Does Airbus improve it's terms on what it offered Ryanair in order to try to lure Easyjet ?

Most certainly for the obvious reason that they just lost to Boeing (as expected ) but also because EasyJet will be hard pressed to justify its slightly more expensive fare if Ryanair is flying brand new 738s. I can see an argument in favour of Airbus in an Easyjet attempt to differentiate its offering with a larger & more comfortable aircraft (As Jet Blue is doing here in NYC)
However, Airbus still face an uphill battle considering that Easyjet has a 737 fleet & some 737s on order.

Stefan
 
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nighthawk
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RE: Effect Of Ryanair Deal On Easyjet Deal?

Fri Jan 25, 2002 3:04 am

I think from the point of view of easyjet in order to go the Airbus route, Airbus would have to offer an amazing deal that involves getting 75 new airbuses, PLUS replacing all thier current fleet with airbus aircraft. I really do not think it is a good idea for EZY to operate boeing and airbus aircraft. I think Airbus will be despirate to get this contract, not only because they lost the ryanair deal, but because there are currently no european budget airliners using airbus planes, at the mo its a beoing monopoly.

Boeing has opened a second 737 rolling production line just this month, so they will be able to produce the 737 at very low prices, whereas Airbus may be consentrating on the A380, pushing to get that ready asap. I think boeing is gonna get this contract too.
 
LJ
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RE: Effect Of Ryanair Deal On Easyjet Deal?

Fri Jan 25, 2002 3:14 am

"I can see an argument in favour of Airbus in an Easyjet attempt to differentiate its offering with a larger & more comfortable aircraft"

150 seats in an A319 more comfortable? I don't think so. Moreover, easyjet already differentiates from Ryanair by using premium airports like LGW, AMS and GVA.

easyJet will probably go for Boeing or they will be punished if they would operate a mixed fleet.

Regards
Laurens
 
Guest

RE: LJ

Fri Jan 25, 2002 4:06 am

LJ, the A319 has a larger cabin, wider seats or a wider aisle, 2 important elements contributing to perceived comfort & to some, the Airbus is also quieter.
The 150 pax configuration is not, I believe, reached by a shorter pitch

Moreover, easyjet already differentiates from Ryanair by using premium airports like LGW, AMS and GVA.

Sure, but EZ could attempt a further differentiation
by using larger airports AND a more comfortable plane.
Nonetheless, I agree with you that the odds are against Airbus. But wasn't Singapore Airlines facing a similar choice with the A340 vs B777 a while ago ?

Regards,

Stefan
 
racko
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RE: Effect Of Ryanair Deal On Easyjet Deal?

Fri Jan 25, 2002 4:17 am

i think many of you don't get the point.

That FR buys 100+50 boeing for a price far lower than the list price (rumours say -30%) will piss off all major european airlines like LH, AF, BA & KL. Boeing supports their enemy (i think the word is correct in this case) with offering them low-low cost planes. SO the majors will put pressure on Boeing to sell them new 744s, 777s etc. for the listprice-30% as well. If Boeing doesn't agree, they will order Airbus. And of course, Boeing can't sell too many planes for such a cheap price, because their shareholders will get pissed off very fast.

I don't know if this was a smart move from Boeing...
 
artsyman
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RE: Effect Of Ryanair Deal On Easyjet Deal?

Fri Jan 25, 2002 4:19 am

The majors already get the 30% + discounts anyways...

Jer
 
cwapilot
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RE: Racko

Fri Jan 25, 2002 4:27 am

If that was the case, then American, Delta, and Continental would all be operating A330/340 instead of almost the entire Boeing lineup due to the sweet deals Southwest gets on 737s. The majors, especially American, HATE Southwest. Also, if Boeing or Airbus sell to BA, they are selling to the enemy of any number of airlines....do they suddenly make big aircraft supplier shifts because they are angry? Of course not.
Southside Irish...our two teams are the White Sox and whoever plays the Cubs!
 
manni
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RE: Racko

Fri Jan 25, 2002 4:50 am

Southwest and Boeing are both American companys.
Ryanair is a European company, not very smart to order such a large number of aircraft from Boeing rather than Airbus in these "difficult aviation days". If Easyjet plays it smart, they could play with this argument! Does that matter? It certainly does matter to me. Anyways even if they had ordered Airbus I would not have flown this crap! Big grin
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racko
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RE: Effect Of Ryanair Deal On Easyjet Deal?

Fri Jan 25, 2002 5:02 am

actually, you can't compare LH vs. BA with LH vs. FR ...

BA is a fair opponent, they compete with LH of course, but they do not break laws etc. ...

LH and BA are opponents, LH and FR are enemies...
 
magyar
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RE: Racko

Fri Jan 25, 2002 5:02 am

Manni wrote:

>>
Southwest and Boeing are both American companys.
Ryanair is a European company, not very smart to order such a large number of aircraft from Boeing rather than Airbus in these "difficult aviation days". If Easyjet plays it smart, they could play with this argument! Does that matter? It certainly does matter to me. Anyways even if they had ordered Airbus I would not have flown this crap!
>>

Well, I hated such arguments when I heard them from Americans,
and I am going to like it when Europians do the same  Sad.

Janos
 
srbmod
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RE: Effect Of Ryanair Deal On Easyjet Deal?

Fri Jan 25, 2002 5:16 am

EasyJet will more than likely try to push Boeing for such a deal, and will even have Airbus propose an offer in order for EasyJet to reach a good deal with Boeing. A good example of using the threat of buying Airbus aircraft as a means to getting a better deal on aircraft was buy Valujet with the MD-95 (B717). Valujet had been interested in the plane from the start, but were not will to pay the price that MD was planning on charging them, so they let Airbus butter them up with the A319 at a good price, and MD finally relented and Valujet placed an order for 50 with 50 options at a very good price.
 
wingman
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RE: Effect Of Ryanair Deal On Easyjet Deal?

Fri Jan 25, 2002 8:19 am

Easyjet may come under some real pressure to buy "European" but hopefully it won't stop them from doing what's best for themselves. It really would be nice to see Boeing regain parity with Airbus in the cross-Continental sales game. It's been too long since since Boeing any any significant victory in Europe while Airbus has had quite a few over the past 5-6 years in the US. The one ace Airbus has up its sleeve is that it knows Boeing cannot possibly give Easyjet a lower price than Ryanair. As long as Airbus knows what the Ryaniar deal was, and I'm sure they do, it is their choice to offer Easyjet something better. The flip side is how to do that and turn a profit. Easyjet will only go for the 319 if the entire package including new aircraft introduction, new pilots, new training, new mechanic training etc all come cheaper that simply ordering more of what you already have and know. That will be extremely difficult for Airbus to do, but they may do it just to guarantee work and cashflow. For all its bravado and chest-thumping, Airbus is entering the most challening years in its history. It's burning money en masse with the 345/6 and soon enough will start having to pay off billion dollar invoices on the 380. Cashflow will be the most critical item on the books for the next 5-7 years. Iw ouldn't be surprised given these circumstances to see Airbus put together an offer Easyjet can't refuse.
 
Bicoastal
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RE: Effect Of Ryanair Deal On Easyjet Deal?

Fri Jan 25, 2002 9:51 am

I flew over 100,000 miles last year. I love both Airbus and Boeing. But to be honest I really can't tell that Airbus has wider aisles, cabins and seats. The 737 and 319/20 series are all designed to get the maximum number of people in a small space. Really, the difference is negligible. And I fly a lot on both types.
Airliners.net has many forums. It has spell check and search functions. Use them before posting!
 
AC320
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RE: Effect Of Ryanair Deal On Easyjet Deal?

Fri Jan 25, 2002 9:53 am

I really think it depends on the airlines you fly. for example after flying on a USAirways 737 and an Air Canada A320 soon after one another, the difference in the comfort levels were quite obvious. Really noticed the increased width, more leg room, etc......
fuddle duddle
 
gkirk
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EasyJet Will Order Boeing

Fri Jan 25, 2002 10:09 am

Come on...Airbus stands no chance! EZY are getting 737-700s all the time so why change to Airbus when 737s are perfect for the job!!
When you hear the noise of the Tartan Army Boys, we'll be coming down the road!
 
KUGN
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RE: Effect Of Ryanair Deal On Easyjet Deal?

Fri Jan 25, 2002 10:43 am

When will Boeing get clearance to pipe 737s down the MD assembly line? If its soon, they would be in position to give EZY an offer they couldn't refuse.
 
Hoffa
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RE: Effect Of Ryanair Deal On Easyjet Deal?

Fri Jan 25, 2002 10:48 am

When will Boeing get clearance to pipe 737s down the MD assembly line? If its soon, they would be in position to give EZY an offer they couldn't refuse.

I think a condition of the EU allowing the MD-Boeing merger in 1997 was that Boeing was specifically prohibited from doing this.
 
KUGN
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RE: Effect Of Ryanair Deal On Easyjet Deal?

Fri Jan 25, 2002 11:31 am

Yes, but when does the ban expire?
 
Guest

RE: Effect Of Ryanair Deal On Easyjet Deal?

Fri Jan 25, 2002 11:35 am

the EU should have no say when it comes to a U.s-U.S merger!
 
Hoffa
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RE: Effect Of Ryanair Deal On Easyjet Deal?

Fri Jan 25, 2002 11:36 am

According to the terms of the agreement with the EC, Boeing is "committed to keep the Douglas Aircraft Company, the civil aircraft division of McDonnell Douglas, a separate company for 10 years, until 2007, and to supply the EC with reports on the company's performance."

I don't know if these means 737 production cannot be moved down to LGB but I suspect so.
 
Hoffa
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RE: Effect Of Ryanair Deal On Easyjet Deal?

Fri Jan 25, 2002 11:39 am

the EU should have no say when it comes to a U.s-U.S merger!

Well that was Boeing's opinion too back in 1997 and nearly resulted in a bitter, protracted, all-out US-EU trade war. Last year's GE-Honeywell deal was also scuppered by the EU and Airbuus.
 
magyar
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RE: Effect Of Ryanair Deal On Easyjet Deal?

Fri Jan 25, 2002 12:49 pm

Boeing in pdx wrote:

>>
the EU should have no say when it comes to a U.s-U.S merger!
<<

As long as the merging US companies have a substantial
portion of their sales (I dunno the exact figures) in the EU,
the latter has a say on the merger. It is true in the opposite
direction as well and I think it is fair. In other words if you
wanna sell 100+50 planes to an EU based company you
have to accept that the EU may don't like some of your
move, it is so simple.

The only thing I like in this Ryanair business is that it should
substantially lower the whinning level of the US aerospace
industry. It will be hard to bash on the EU for the A380 loans, subsidies, etc., when the biggest order for the B737NG
is from the EU.

Janos
 
LJ
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RE: Effect Of Ryanair Deal On Easyjet Deal?

Fri Jan 25, 2002 11:00 pm

Racko, at least it doesn't stop KLM from ordering Boeing. i don't know if it's true but the rumour is they orded 4 additional B737-900 a couple of days ago.

BTW the order of 75 jets is an addition to the 25 B737NG still outstanding.

As for Boeing. I've read somewhere they'll open an additional B737 production line to keep up with demand.

Regards
Laurens
 
KUGN
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RE: Effect Of Ryanair Deal On Easyjet Deal?

Fri Jan 25, 2002 11:39 pm

I would guess that it would be reasonable that after the EU limitation expires, if the MD plant is alive at all, it would be wise from Boeing to move some - at least narrowbody - assemblies down to California. Right in time for Ryanair options.

Think how could that improve order to delivery cycle time. It would be good for everyone.

Magyar -- I agree that company entering someone's market has to honor their regulations and standars. I'm bit skeptical on this particular case, but in general, yes local codes, rules, standards have to be honored.

This isn't biggie, 2007 is around the corner  Big grin
 
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nighthawk
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RE: Effect Of Ryanair Deal On Easyjet Deal?

Sat Jan 26, 2002 1:08 am

Boeing opened a second rolling 737 production line two weeks ago. That is probably why they were able to offer ryanair such a good deal
 
travellin'man
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RE: Effect Of Ryanair Deal On Easyjet Deal?

Sat Jan 26, 2002 1:23 am

The Ryanair deal ironically gives both Boeing and Airbus more leverage for Easyjet. The Ryanair deal takes some financial pressure off Boeing, and I think means that they have room to negotiate. It also means that Airbus can go even lower than the Ryanair price (if they can afford to), while Boeing probably couldn't without pissing off Ryanair, unless Easyjet orders a higher number of jets, which is unlikely.
It is not enough to be rude; one must also be incorrect.
 
LJ
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RE: Effect Of Ryanair Deal On Easyjet Deal?

Sat Jan 26, 2002 3:33 am

Boeing doesn't want to loose the EZY deal as it means that any future procurement by EZY will be Boeing. If Boeing lands the EZY deal it knows that it has the two largest oeprators of short/medium haul airlines in Europe onboard. A very comforting fact as this will give Boeing a better bargaining position against any other airline.

Regards
Laurens

 
Greg
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RE: Effect Of Ryanair Deal On Easyjet Deal?

Sat Jan 26, 2002 4:36 am

If the cabin of the A320 is so wide..why does my shoulder touch it when I sit in a window seat? This doesn't happen on the 737/757.

The extra space is negligible...I actually thought American's 738 cabin looks and felt more comfortable than UA 320's.
 
Guest

RE: Effect Of Ryanair Deal On Easyjet Deal?

Sat Jan 26, 2002 4:42 am

The Airbus is a more expensive aircraft to operate than the 737 - especially on shot hops.

And as for the discounts - the more you spend (especially when it's a buyer's market) the better the deal you get.

Very simple, folks!
 
F4N
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RE: Effect Of Ryanair Deal On Easyjet Deal?

Sat Jan 26, 2002 6:52 am

To all:

I believe Ceilidh has it right; it comes down to money.
In the case of the low-fares, the 737 seems to have the edge(as indicated by sales to these carriers)and since EasyJet already operates 737's, I don't think an Airbus order makes much sense. EasyJet certainly won't be able to operate a mixed fleet and compete with the successful European low-fares.

Bicoastal:

I flew UA A319's a number of times now BUF-ORD-LAX and I can assure everyone it wasn''t pretty; after an hour or so, I was looking for that extra cabin width and wondering who was benefitting from it besides the aisle cart! Yes, I know configuration is the domain of the carrier, but I say this simply because the A319 cabin width thing came up in this post. I don't see it being a
consideration.

It all comes down to the deal...I expect more 737's.

Regards,

F4N

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