Francoflier wrote:

That may be true, but then again we don't know how aggressive Ryanair was with their offer. They certainly tend to be, especially when they smell blood...

No, we do not know that. FR are indeed very aggressive when it comes to getting good deals.

I will say that I find it interesting that this site frequently congratulates DL for doing exactly the same thing WRT aggression, albeit without any personality. I mention this as MOL is exceptionally good at this sort of thing. FR's purchasing record is something most other companies do envy. More below...

Francoflier wrote:

There is no indication that Boeing is unrealistic with prices.

It really depends on how you mean that.

In terms of general product competiveness? In MOL's position, anything above 60% AB last and best is not acceptable. BCA also need to ditch their resale restrictions. They simply have no leverage in the NB market and should take whatever price an airline is willing to offer.

In terms of what can BCA afford to offer, I would then agree with you. They are in a very sticky wicket where they desperately need orders like FR's. But they also need to do that above cost.

Francoflier wrote:

My opinion here is that FR was trying to get Boeing to sell at a loss, or something so ridiculously low that there was simply no point in Boeing even manufacturing these frames.

MOL will not approve a sale that is significantly above cost, obviously. And scuttlebutt on the street —I know, worth the paper it is written on— is that the real issue here is that MOL does not feel BCA are being upfront or even honest/realistic about what those costs are, and that is the issue stalling this out more than anything else.

Francoflier wrote:

It's standard practice for FR to walk in a negotiation room like they're the only one in the World buying airplanes, but these days I just can't understand their strategy...

Because as far as BCA are concerned, they are. Boeing altogether will not be revenue positive this year and without significant improvement over those estimates, their cash position will not be sustainable. BCA by itself is a financial trash fire right now.

Francoflier wrote:

Orders for 100+ narrowbodies are not uncommon anymore, and as much as Boeing would like to sell the MAX10, they might just as well sell any other variant of the same plane instead, which will be produced on the same line, at a higher profit per frame. On the other side, Airbus has no incentive to lower prices at all on the NEO, much less the 321, and they seem to have little patience for Ryanair at the moment.

What's FR's leverage here?

Generally, yeah. But these days they are uncommon enough for BCA. When we take out credits and discounts, the profitability of the MAX becomes more than a little unrealistic over the next half-decade. Things like COVID and the ongoing costs of restarting that line do not help either.

As well, they are not delivering any other products from Commercial. They really are on their back feet here.

So off hand, I would say that part of FR's leverage is that they are the only large offer BCA are fishing for apart from the dubious possibility of QF. I know we expect them to get that, but that still could end up not happening.

Another major thing FR has for leverage is MOL himself. Again, this site does not like to be candid about it, but the man is exceptionally talented at this sort of thing. He did not become a billionaire by subsidizing BCA's —or AB's— production inefficiencies. Also worthy of note is the fact that he has been in this game a lot longer than anyone currently employed in BCA's sales teams. It is likely that he knows more about their operations and what their cost structures than they do.
So while when you say he 'smells blood,' that is likely true.
But I would say that more than anything, what he really smells is arrogance. Turning that upside down is very likely something he would consider to be a homefield advantage.

I am not truly sure how much that works out to for leverage, but I am certain that it is not nothing.

marcelh wrote:

The MAX10 will come to Ryanair sooner or later, but only a bit less cheap. IMHO they need the plane for further expansion. With the MAX8-200 Ryanair is already adding capacity without adding flights and the MAX10 will be the next step.

By 'a bit less cheap' are you suggesting that FR in the end will pay a bit more than what they and BCA are stuck on now? Or did you mean 'a little cheaper?'

I don't disagree with any of that, but at the end of the day, it's hard to tell what any party's position was and who's bluffing here.

The basic rules of the market still apply. FR needs airplanes, they can get them from AB or BCA. AB isn't interested, at least not at a price FR will go for. That leaves Boeing and the MAX.

The cost of production of the MAX 10 is irrelevant to price negotiations. The only thing that matters is how much FR needs these airplanes vs. how much Boeing wants to sell them.

I understand that MOL does not want to overpay for anything, but when I need a carton of milk at 11pm, I'll pay what the local convenience store wants me to pay because it's the only place I can get it from at that time, regardless of whether it costs half the price at the local supermarket or what it cost the producer to make...
Not that I think Boeing is gouging prices here, but they have no interest to sell at zero cost or at a loss either. Their cash position may be trash, but there is a limit to how bad a 'loan' you can take to fix it before it just makes it worse.
The MAX may be a troubled program, but they still have around 4000 frames to deliver. It is likely that demand will pick up before they finish assembling them.

JonesNL wrote:

FlapOperator wrote:

eta unknown wrote:

For those of you who remember a previous Airbus spat (I think they did forward list prices!):Article ii n French:
https://www.latribune.fr/entreprises-fi ... -faim.html

My French is rusty as heck, but were I a AB stockholder, I'd be a little concerned that the management thinks so highly of their product that they could afford to just walk away from business.

As an small Airbus stockholder I really don't mind Airbus giving Ryanair the finger.

Am also a holder of a small amount of Airbus shares and think similarly.

JonesNL wrote:

Its an customer that wants you to work harder for less when you are in need the most. High effort low profit...

Not to mention dragging your name through the press afterwards if they don't get exactly the price they want.

FlapOperator wrote:

Well, good luck with that.

Oddly enough, in any economic system, maximizers tend to do the best.

The Wall Street attitude of squeezing every last cent out of every department, gutting Engineering resourcing + R&D, outsourcing as much as possible has successfully driven Boeing into the ground.

....quite literally in the case of the MAXs.

HTCone wrote:

Airbus don’t need to sell at or below cost as Ryanair are used to getting, the margins they are making on the 321 in particular are supposedly excellent right now because there’s no competition and thus they don’t have to price too aggressively.

Exactly. Innovation leads to having a product that gives you pricing power over the market. Why would you sell a position on the high demand A321 production line to a low margin customer when there's plenty of higher margin deals to be done. To Ryanair it largely doesn't matter if they operate A321s or 737-10s, so long as the price is right. For someone replacing 757/767s the lack of market competitors means they've got little choice but to acquire XLRs. Airbus can and will price the production slot accordingly.

Revelation wrote:

MIflyer12 wrote:

Revelation wrote:

And known for treating their employees like garbage too.

And yet they have been able to staff a growing airline, indicating they're paying - at least - market wages. It's the AFs, Alitalia and AAs that are overpaying, relative to labor productivity.

How terrible AF etc aren't wringing the last penny out of the dollar! Maybe they can be as good as Wal*Mart and get their employees on public support as well. Yay, Capitalism!

Indeed that is the long term effect. Particularly relevant given the issue of Ryanair subsidiary Lauda Air paying crew less than the Austrian minimum wage. I believe the issue was "solved" by switching the AOC to Malta (Lauda Europe), making the Maltese minimum wage apply.

travaz wrote:

Daysleeper wrote:

Revelation wrote:

We have both been here a long time, and we have clashed over a difference of opinion more than once, which is cool, its what forums are for. But here we 100% agree. I don’t care what airline I am flying be it an ULCC or LCC or BA, I want the flight crew to be well rested, well paid and in the right mindset should shit go south.

I have often wondered about the business model of LCC’s. I understand that they are no frills hence cheap, therefore you can go without service. As a fattish European I can happily go almost a month without food, so a three-hour flight should be fine. Hell I could perhaps even do 4 days without water and still live to tell the tail. But what I can’t do is survive at 40K feet without jet fuel.

This is the reason I wont fly on a ULCC. I think people should be paid a fair wage so they can enjoy their life with family. Bottom line pay a little bit more so the crews can be paid a fair wage. BTW I don't shop at Walmart either.

Agreed. The unfortunate effect of Ryanair is that their scummy labor practices (making flight crew independent contractors not employees in order to shirk their responsibilities regarding taxes, social security contributions, sick pay etc) essentially forces their competitors to do the same. So they will. Wizzair now does all of the above. So does Volotea IIRC. And now SAS does also via their Scandinavian Airlines Ireland subsidiary. Thus you've got a race to the bottom. Easyjet doesn't engage in such scummy labor practices and thus will always be at a big cost disadvantage to Ryanair.

I remember an incident discussed here a year or two ago where a Ryanair Crew diverted somewhere in the Canary Islands, timed out and slept on the airport floor because finding them accommodation wasn't Ryanair's problem.

That's not who I want to be flying me home and would never happen with Lufthansa, Swiss, KLM or Air France.

Captaincurious wrote:

I believe in the market and you can't deny that people still work in Ryanair despite their low wages, which shows there is a demand for those jobs.

That doesn't show that Ryanair is ok, it shows that unemployed pilots have little other employment choices.

DarkSnowyNight wrote:

Francoflier wrote:

That may be true, but then again we don't know how aggressive Ryanair was with their offer. They certainly tend to be, especially when they smell blood...

No, we do not know that. FR are indeed very aggressive when it comes to getting good deals.

I will say that I find it interesting that this site frequently congratulates DL for doing exactly the same thing WRT aggression, albeit without any personality. I mention this as MOL is exceptionally good at this sort of thing. FR's purchasing record is something most other companies do envy. More below...

Francoflier wrote:

There is no indication that Boeing is unrealistic with prices.

It really depends on how you mean that.

In terms of general product competiveness? In MOL's position, anything above 60% AB last and best is not acceptable. BCA also need to ditch their resale restrictions. They simply have no leverage in the NB market and should take whatever price an airline is willing to offer.

In terms of what can BCA afford to offer, I would then agree with you. They are in a very sticky wicket where they desperately need orders like FR's. But they also need to do that above cost.

Francoflier wrote:

My opinion here is that FR was trying to get Boeing to sell at a loss, or something so ridiculously low that there was simply no point in Boeing even manufacturing these frames.

MOL will not approve a sale that is significantly above cost, obviously. And scuttlebutt on the street —I know, worth the paper it is written on— is that the real issue here is that MOL does not feel BCA are being upfront or even honest/realistic about what those costs are, and that is the issue stalling this out more than anything else.

Francoflier wrote:

It's standard practice for FR to walk in a negotiation room like they're the only one in the World buying airplanes, but these days I just can't understand their strategy...

Because as far as BCA are concerned, they are. Boeing altogether will not be revenue positive this year and without significant improvement over those estimates, their cash position will not be sustainable. BCA by itself is a financial trash fire right now.

Francoflier wrote:

Orders for 100+ narrowbodies are not uncommon anymore, and as much as Boeing would like to sell the MAX10, they might just as well sell any other variant of the same plane instead, which will be produced on the same line, at a higher profit per frame. On the other side, Airbus has no incentive to lower prices at all on the NEO, much less the 321, and they seem to have little patience for Ryanair at the moment.

What's FR's leverage here?

Generally, yeah. But these days they are uncommon enough for BCA. When we take out credits and discounts, the profitability of the MAX becomes more than a little unrealistic over the next half-decade. Things like COVID and the ongoing costs of restarting that line do not help either.

As well, they are not delivering any other products from Commercial. They really are on their back feet here.

So off hand, I would say that part of FR's leverage is that they are the only large offer BCA are fishing for apart from the dubious possibility of QF. I know we expect them to get that, but that still could end up not happening.

Another major thing FR has for leverage is MOL himself. Again, this site does not like to be candid about it, but the man is exceptionally talented at this sort of thing. He did not become a billionaire by subsidizing BCA's —or AB's— production inefficiencies. Also worthy of note is the fact that he has been in this game a lot longer than anyone currently employed in BCA's sales teams. It is likely that he knows more about their operations and what their cost structures than they do.
So while when you say he 'smells blood,' that is likely true.
But I would say that more than anything, what he really smells is arrogance. Turning that upside down is very likely something he would consider to be a homefield advantage.

I am not truly sure how much that works out to for leverage, but I am certain that it is not nothing.

1. MOL has zero leverage on Boeing. Literally zero. The only way he gets some leverage is by going Airbus, and this is unlikely to save him money.

2. No airline out there is in position to know what the cost structures at an OEM are, and better than the OEM. It is madness. Ryanair think that they have use for MAX10's, they just do not want to pay what is being asked. It will be fascinating to see whether they get their way or not.

jfklganyc wrote:

Has this ever happened before?

A very public spat between the manufacturer and airline over negotiations on a price of an aircraft?

Not specifically on pricing, but I think it's fairly well known that Akbar Al-Bakar's preferred method of negotiating is via the press.

DarkSnowyNight wrote:

MCTSET wrote:

Surely Ryanair need the MAX 10.

Do they though? The MAX10 does not have the capability the 321s do, both for capacity and performance. The only operational advantage for the 10 is that FR already uses the 8 and can save a nickel here and there on crew costs and some MX items. But even that edge goes away if FR get enough 321s online.

The 321s are more expensive and will take longer to deliver. But, MOL is right to take BCA to task over pricing. The MAX10 is a better choice only if FR can get better delivery times and much lower acquisition cost. If BCA insists on pricing themselves out of the market with an inferior product, that is their problem, not FR's.

You've made an assumption that due to capability and performance the A321 is superior to the MAX 10 for FR. Really? How do you know that? And why is the MAX 10 in your words " an inferior product?".

It terms of all the reports I have read the MAX 10 is highly competitive with the A321 NEO in terms of fuel burn and CASM. FR does not need a plane that flies 4500 nm. They need a high capacity narrow body for mostly intra European travel or to the Canaries. All well within the MAX 10's capability. So then it comes down to price, availability, fuel cost, training costs, and maintenance.

I have no idea which aircraft is superior across those metrics for FR, but my guess is the MAX 10 is far more competitive than you are implying. In fact, I would say it is obvious unless FR is completely incompetent regarding new aircraft acquisition as they have clearly shown strong interest in the MAX 10 if the price is right.

Elkadad313 wrote:

marcelh wrote:

The MAX10 will come to Ryanair sooner or later, but only a bit less cheap. IMHO they need the plane for further expansion. With the MAX8-200 Ryanair is already adding capacity without adding flights and the MAX10 will be the next step.

By 'a bit less cheap' are you suggesting that FR in the end will pay a bit more than what they and BCA are stuck on now? Or did you mean 'a little cheaper?'

I meant “Ryanair pays a bit more”

2175301 wrote:

jfklganyc wrote:

Has this ever happened before?

A very public spat between the manufacturer and airline over negotiations on a price of an aircraft?

Seems very bush league to me. Not professional at all.

This is essentially the reason Airbus is not chasing orders or willing to cut major deals from Ryanair...

No effort from Airbus means Boeing can stick any price tag for its 737-10 for Ryanair.
Does this make sense?

The more public this "drama" is celebrated by both sides in public the more likely I consider they will sign a deal soon.

Some of you seem to think that BCA and AB are in the business to produce planes at a cost that works for Ryanair business model and not for them....

Ultra-aggressive pricing, be it from A or B, has potential consequences on existing MFN deals with other customers that call for repricing adjustments if a better deal is later offered to potential competotors elsewhere. I doubt if A has slammed the door and thrown away the key. They simply recognise that the 737 is incumbant and that RYR will always conjure up an introductory cost hurdle to get over and may see better profitability from pursuing less deep-rooted 737-oriented prospects.

Could it be that when both "best and final" offers have been tabled in the past, that B (alone) has become aware of the price they have to beat. If so, such behaviour can only be repeated once or twice before the futility of bidding becomes obvious. Conversely, if it is a certainty that A is not going to bid or only offer a small(er) discount, why should B go the extra mile to match RYR expectations? Just sit and wait until the need for planes becomes more urgent and the deal is accepted.

VV wrote:

2175301 wrote:

jfklganyc wrote:

Has this ever happened before?

A very public spat between the manufacturer and airline over negotiations on a price of an aircraft?

Seems very bush league to me. Not professional at all.

This is essentially the reason Airbus is not chasing orders or willing to cut major deals from Ryanair...

No effort from Airbus means Boeing can stick any price tag for its 737-10 for Ryanair.
Does this make sense?

Of course it makes sense in this specific case. Are you confused again?

Wildlander wrote:

Conversely, if it is a certainty that A is not going to bid or only offer a small(er) discount, why should B go the extra mile to match RYR expectations? Just sit and wait until the need for planes becomes more urgent and the deal is accepted.

As others have said, it's difficult to see where Ryanair has any leverage here.

Ryanair has a ton of 737 options at various prices based on prior deals. Boeing will honor those until they expire. Pro rating these option prices to the -10 size would be an OK deal for both parties IF economic conditions remain comparable.

This last year has been anything but normal, Aluminum prices are crazy high and many alloys have become scarce. General construction costs in the US are like 30% more year to year. Composite materials are the same way. Will this continue? Seeing 1 year of this requires projecting out 2 to 3 years, quite tricky. It is surely back to strong material cost index adjustments in the contracts.

These 737-10's would be priced at the current market conditions at the same 'deal' that WN, AA, and other airlines that order in the 100's get. Well the held options probably look like a bargain at this point.

Why would anybody exclude the A321neo? It certainly IS an option. Especially if FR should have decided to want to grow into bigger seat numbers.
However Airbus being sold out for years might not be ready for special pricing. There still might be A321neo orders being reshuffled these days with cheaper production slots becoming available early.

Noshow wrote:

Why would anybody exclude the A321neo? It certainly IS an option. Especially if FR should have decided to want to grow into bigger seat numbers.
However Airbus being sold out for years might not be ready for special pricing. There still might be A321neo orders being reshuffled these days with cheaper production slots becoming available early.

Simple; price too high for MOL, price won't go down due to availability.

MOL is being petty, both A and B need financial discipline, especially considering the last couple of years. Airlines will come and go, Don't think anything like Airbus or Boeing will come by as easy.

Ryan Air waited too long, If they wanted a dream deal, probably IAG's Max "order" was the time. And with Easyjet and Wizz air adding A321neos and getting their per seat costs down, Ryan air needs a bigger plane sooner than later. Yes there will be Max10 order, but not at the price MOL wants.

irelayer wrote:

Opus99 wrote:

VMCA787 wrote:

Don't be so sure. Airbus can cut some pretty amazing deals and if Airbus really wanted to make a deal with FR, they could. It would have to cover the training costs though and that is the real fly in the ointment.

Airbus won’t answer Ryanair. Ryanair did Airbus dirty a few years back if I recall correctly. Something along the lines of the deal was pretty much ready to go and then Ryanair did a last minute with Boeing and that was it.

Also Airbus don’t need the business

That's a fairly ridiculous statement, I'm sorry. If you own a business and you have this mentality, you are inevitably going to go out of business at some point. Airbus is a corporation, they sell things, they like money, and they most definitely NEED the business. They can't afford to not sell things, unless it isn't profitable for them.

Maybe you should have said "Ryanair's business is not worth it to Airbus at the present moment"

I hope the Airbus execs don't have this much hubris.

I don't see this as a ridiculous statement at all.

It is unrealistic to expect that in such a clear duopoly as there is in this market, that every order is worth chasing.

Ryanair, like Southwest, is completely built around the 737 and nothing else.
In order to make building a new model like the A321NEO into the fleet worthwhile, it would absolutely HAVE to be priced way lower than the 737-10 price that MOL has already balked at.

There is ZERO benefit to Airbus to chase a below-cost order for their most popular product, that they are clearly selling elsewhere at 20%+ margins, and can't build fast enough to satisfy the orders they already have. None.

Does anyone here believe that MOL wants anything other than 737's? The only thing under discussion here is the price.
Not the type

Rgds

Wildlander wrote:

Ultra-aggressive pricing, be it from A or B, has potential consequences on existing MFN deals with other customers that call for repricing adjustments if a better deal is later offered to potential competotors elsewhere.

I think you might be close to it there. If Airbus offer FR a fantastically cheap fleet of A32x’s this could impact their pricing with easyJet and Wizz, which is about 350 frames already. Airbus might end up selling about 500 NEOs at bargain basement prices. I don’t see why they should/would?

All of that said the -10 should work just fine for FR. They don’t want, or need the range. The high capacity needs are at the core of their network, U.K.-Italy, U.K.-Ireland, U.K.-Eastern Europe. Very few performance limiting runways among that group, think STN, DUB, CIA, BGY, BCN, KRK, etc. Not FLR, LCY etc

Boeing should hold firm on price. Ryanair will not be ordering Airbus. They could get a token amount for Lauda though and pretend it's some kind of strategy to move towards Airbus.
The only issue for Boeing is if, like last time, they needed a big order to keep the production line moving like they did 20 years ago, but i think Boeing don't have that problem now.

ElroyJetson wrote:

DarkSnowyNight wrote:

MCTSET wrote:

Surely Ryanair need the MAX 10.

Do they though? The MAX10 does not have the capability the 321s do, both for capacity and performance. The only operational advantage for the 10 is that FR already uses the 8 and can save a nickel here and there on crew costs and some MX items. But even that edge goes away if FR get enough 321s online.

The 321s are more expensive and will take longer to deliver. But, MOL is right to take BCA to task over pricing. The MAX10 is a better choice only if FR can get better delivery times and much lower acquisition cost. If BCA insists on pricing themselves out of the market with an inferior product, that is their problem, not FR's.

You've made an assumption that due to capability and performance the A321 is superior to the MAX 10 for FR. Really? How do you know that? And why is the MAX 10 in your words " an inferior product?".

It terms of all the reports I have read the MAX 10 is highly competitive with the A321 NEO in terms of fuel burn and CASM. FR does not need a plane that flies 4500 nm. They need a high capacity narrow body for mostly intra European travel or to the Canaries. All well within the MAX 10's capability. So then it comes down to price, availability, fuel cost, training costs, and maintenance.

I have no idea which aircraft is superior across those metrics for FR, but my guess is the MAX 10 is far more competitive than you are implying. In fact, I would say it is obvious unless FR is completely incompetent regarding new aircraft acquisition as they have clearly shown strong interest in the MAX 10 if the price is right.

Airlines have tried new routes because there was something that allowed them to so with the right capacity. The right equipment, with the right range is what determines what routes airlines would like to fly. Airlines like Ryanair and Southwest having chosen Boeing, and maybe not wanting new equipment because of commonality, have to live with that decision.

Gremlinzzzz wrote:

1. MOL has zero leverage on Boeing. Literally zero. The only way he gets some leverage is by going Airbus, and this is unlikely to save him money.

2. No airline out there is in position to know what the cost structures at an OEM are, and better than the OEM. It is madness. Ryanair think that they have use for MAX10's, they just do not want to pay what is being asked. It will be fascinating to see whether they get their way or not.

BA's stock price is down just 0.58% at 8:08am EDT. That suggests the market is shrugging off the absence of Ryanair's order, perhaps due to:

- it didn't think size of the order was going to be material

- if an order were to be made, the margins would be low

- the market had built in a low expectation of an order

Boeing will survive to another day.

I for one am just glad that this puts an end, forever, to the a.net myth that Boeing gives away at/under cost to big customers, especially on the MAX. Yay!

I wonder what Ryanair’s price point is and what Boeing’s is. Curious to know how wide the gap is

MIflyer12 wrote:

Gremlinzzzz wrote:

1. MOL has zero leverage on Boeing. Literally zero. The only way he gets some leverage is by going Airbus, and this is unlikely to save him money.

2. No airline out there is in position to know what the cost structures at an OEM are, and better than the OEM. It is madness. Ryanair think that they have use for MAX10's, they just do not want to pay what is being asked. It will be fascinating to see whether they get their way or not.

BA's stock price is down just 0.58% at 8:08am EDT. That suggests the market is shrugging off the absence of Ryanair's order, perhaps due to:

- it didn't think size of the order was going to be material

- if an order were to be made, the margins would be low

- the market had built in a low expectation of an order

Boeing will survive to another day.

Yes - exactly and Boeing is not just BCA. It has the defence side as well.

In the latest Quarter they only burned $500 Million of cash with $21 Billion in the bank. They are not a dumpster fire.

In that quarter they delivered 50 MAX and 12 787.

787 will of course be close to zero - but over the next 15 months or so there will be what 150+ 787's delivered and 400-500 MAX? That will throw off a lot of cash and combined with defence most likely take them back to a superior cash flow position than Airbus.

They have also reduced overhead substantially.

They do not need the Ryanair order. It will take them most of this decade to deliver the existing MAX orders and they will get more.

Can we all agree this is all posture and puffing out the chests? Boeing isn't gonna let this one get away, and of course Ryanair has the upper hand in this.

Now. I would be shocked if Ryanair went with Airbus, but does anyone really think that is even a possibility? We have seen airlines snub from one fleet type to another, but I don't think we have seen such a large size airline do something like that?

suspect we will see some 8200 options get exercised... plus a smaller 10MAX order.

MIflyer12 wrote:

Gremlinzzzz wrote:

1. MOL has zero leverage on Boeing. Literally zero. The only way he gets some leverage is by going Airbus, and this is unlikely to save him money.

2. No airline out there is in position to know what the cost structures at an OEM are, and better than the OEM. It is madness. Ryanair think that they have use for MAX10's, they just do not want to pay what is being asked. It will be fascinating to see whether they get their way or not.

BA's stock price is down just 0.58% at 8:08am EDT. That suggests the market is shrugging off the absence of Ryanair's order, perhaps due to:

- it didn't think size of the order was going to be material

- if an order were to be made, the margins would be low

- the market had built in a low expectation of an order

Boeing will survive to another day.

I think people pay way too much attention to the stock market and try to link everything to it. There is a tonne of money out there, too much liquidity and most of it in the stock market. Even meme stocks are on an upward trajectory.

Ryanair thinks that they should always get planes cheap. Boeing seems to think that this is the time to sure up some profits when it comes to new orders. The truth is that Ryanair does not have options. They either get Boeing, or spend more to get Airbus planes whilst adding some complexity to their operation.

texl1649 wrote:

I for one am just glad that this puts an end, forever, to the a.net myth that Boeing gives away at/under cost to big customers, especially on the MAX. Yay!

Actually there is a public record of what Boeing was willing to sell planes for- and the order wasn't that big. Research the Air India 787 sale and what came out when AI was required to publicly disclose how much they actually paid for the aircraft. However, I'm sure other manufacturers have done similar deals when required, so you do what you have to do at that given time.

Was involved from an MRO perspective in a major component overhaul contract with a large US airline. This MRO held the contract for 20+ years and provided good on-time performance at a then good price that the airline accepted. So at contract renewal, the MRO was told to drop their contract price by at least 40% to be competitive with new entrants for the contract. No profit at this expected new price and 2 MRO's underbid at below their breakeven to get the contract. The MRO I was involved with bid just above breakeven and lost the contract. Within a year this airline was begging my MRO to 'help out' the airline at the old contract price as the MRO's awarded the new contract could not meet the performance times and the airline was at times grounding aircraft waiting for the overhauled components. Sometimes its best to let the airlines think they have the OEM or vendor at their mercy and very soon find out they need the them and are willing to pay the agreed cost.

F9Animal wrote:

Can we all agree this is all posture and puffing out the chests? Boeing isn't gonna let this one get away, and of course Ryanair has the upper hand in this.

Now. I would be shocked if Ryanair went with Airbus, but does anyone really think that is even a possibility? We have seen airlines snub from one fleet type to another, but I don't think we have seen such a large size airline do something like that?

I'm not sure I follow- how does FR have the upper hand? I think the opposite: Boeing has their line in the sand and FR isn't going to get the bargain of the century like last time... that was then, this is now- times change.

Who is the big European airline with a large Boeing narrow body fleet that requires their 737 to be replaced ... Transavia maybe. How many aircrafts are they thinking to order ... 160.

Would that be a consideration for Boeing and Ryanair regarding their negotiations. I am guessing that Ryanair want those production slots not only to expand but also hamper the negotiations between Boeing and the Air France-KLM Group for the right price. Boeing on the other hand are in negotiations with Air France-KLM and I am sure the productions slots are being discussed. Then you have KLM who are also looking to renew their narrow body fleet.

I think Boeing have finally learnt how to play baccarat, other than Texas hold'em.

oceanvikram wrote:

Who is the big European airline with a large Boeing narrow body fleet that requires their 737 to be replaced ... Transavia maybe. How many aircrafts are they thinking to order ... 160.

Would that be a consideration for Boeing and Ryanair regarding their negotiations. I am guessing that Ryanair want those production slots not only to expand but also hamper the negotiations between Boeing and the Air France-KLM Group for the right price. Boeing on the other hand are in negotiations with Air France-KLM and I am sure the productions slots are being discussed. Then you have KLM who are also looking to renew their narrow body fleet.

I think Boeing have finally learnt how to play baccarat, other than Texas hold'em.

Ryanair will not have an order so huge that they can block other airlines getting planes, and whatever order they have will be spread over years.

eta unknown wrote:

texl1649 wrote:

I for one am just glad that this puts an end, forever, to the a.net myth that Boeing gives away at/under cost to big customers, especially on the MAX. Yay!

Actually there is a public record of what Boeing was willing to sell planes for- and the order wasn't that big. Research the Air India 787 sale and what came out when AI was required to publicly disclose how much they actually paid for the aircraft. However, I'm sure other manufacturers have done similar deals when required, so you do what you have to do at that given time.

Those 787's were very unique Aircraft. Google 787 Terrible teens. They were way overweight on no one wanted them.

They had very unique maintenance demands - but as Air India is renowned for maybe not doing so much maintenance anyways - it was a perfect fit.

Something was better than nothing.

F9Animal wrote:

Boeing isn't gonna let this one get away, and of course Ryanair has the upper hand in this.

How does Ryanair have the upper hand?

Erau82 wrote:

Was involved from an MRO perspective in a major component overhaul contract with a large US airline. This MRO held the contract for 20+ years and provided good on-time performance at a then good price that the airline accepted. So at contract renewal, the MRO was told to drop their contract price by at least 40% to be competitive with new entrants for the contract. No profit at this expected new price and 2 MRO's underbid at below their breakeven to get the contract. The MRO I was involved with bid just above breakeven and lost the contract. Within a year this airline was begging my MRO to 'help out' the airline at the old contract price as the MRO's awarded the new contract could not meet the performance times and the airline was at times grounding aircraft waiting for the overhauled components. Sometimes its best to let the airlines think they have the OEM or vendor at their mercy and very soon find out they need the them and are willing to pay the agreed cost.

Boeing should be aware of this, after face planting the 787 outsourcing. Hire lots of subs that are doing design at bargain prices, buy said company years later for large sums to bail out the program. A total disaster like your example above.

Your MRO should have provided services at full list prices, as the old contract price isn't really valid anymore. I'd be curious how things go at the next contract RFP as to whether this airline learned that performance is more important than price.

Apparently Boeing wasn't willing to give away the farm.

ILNFlyer wrote:

Apparently Boeing wasn't willing to give away the farm.

If Boeing is playing hard ball, what is Ryanair going to do?
Order E190-E2? LOL.

F9Animal wrote:

Can we all agree this is all posture and puffing out the chests? Boeing isn't gonna let this one get away, and of course Ryanair has the upper hand in this.

Now. I would be shocked if Ryanair went with Airbus, but does anyone really think that is even a possibility? We have seen airlines snub from one fleet type to another, but I don't think we have seen such a large size airline do something like that?

No, we cannot, because what you have stated is simply not a fact, which is something we can all agree on.

Didn't MOL miss the opportunity of the decade to land a hefty deal, last year while Boeing was still struggling with the MAX grounding?

With Boeing out of its darkest years, I guess the deal MOL is dreaming of, will never happen?

FriscoHeavy wrote:

F9Animal wrote:

Can we all agree this is all posture and puffing out the chests? Boeing isn't gonna let this one get away, and of course Ryanair has the upper hand in this.

Now. I would be shocked if Ryanair went with Airbus, but does anyone really think that is even a possibility? We have seen airlines snub from one fleet type to another, but I don't think we have seen such a large size airline do something like that?

No, we cannot, because what you have stated is simply not a fact, which is something we can all agree on.

I think it's that MOL exemplifies the persona of those who ultimately get what they want whether that necessitates lying, abuse of power, or behaving in an otherwise contemptable, inappropriate or aggregious manner. Folks get fascinated watching types like him manuever. It fuels the media. So, we get claims like 'MOL has Boeing by the shorthairs again'.. blah, blah, blah. Stuff of legend.

I'm relieved to see Boeing exercise discipline and pursuing sustainability over shortterm volume gains (In the grand scheme of things the loss of 100 MAX10s won't break the entire MAX program that still sits at a 4000 plane backlog). Maybe MOL can get some inexpensive end of the line MAX10s in 2032-2035. That might be compelling for both parties at that point..

Looking at list prices gives us an opportunity to see the delta between 737 MAX 8-200 and the 737 MAX 10. So perhaps MOL wanted prices closer to what he paid for his large traunch of the 8200s? Who knows.

737-700 – $89.1 million
737 MAX 7 – $99.7 million
737 MAX 8 – $121.6 million
737 MAX 8-200 - $124.8 million
737 MAX 10 – $134.9 million

That price delta can be absorbed by spreading out the overall cost over 33 extra seats on every flight for the life of the plane.That math only holds if you are filling them all. So, perhaps we will soon see Ryanair exercise their 8200 options in a split fashion with a few of them converted to MAX10s as a small subfleet for specific high volume routes in somewhat slot restricted airports. By ordering fewer of the larger planes it would give them the fleet flexibility they are after without the significant outlay encourntered by purchase a few examples of the more expensive model. And by carefully placing those more expensive planes on routes where they will be full more often... that seat delta will overcome the price delta.

It will be interesting to see what they do. I'm sure this isn't over. Rather the negotiations might take a thanksgiving/christmas break.

VV wrote:

ILNFlyer wrote:

Apparently Boeing wasn't willing to give away the farm.

If Boeing is playing hard ball, what is Ryanair going to do? Do what Delta did and place a massive order with Embraer for the new turboprop.

morrisond wrote:

eta unknown wrote:

texl1649 wrote:

I for one am just glad that this puts an end, forever, to the a.net myth that Boeing gives away at/under cost to big customers, especially on the MAX. Yay!

Actually there is a public record of what Boeing was willing to sell planes for- and the order wasn't that big. Research the Air India 787 sale and what came out when AI was required to publicly disclose how much they actually paid for the aircraft. However, I'm sure other manufacturers have done similar deals when required, so you do what you have to do at that given time.

Those 787's were very unique Aircraft. Google 787 Terrible teens. They were way overweight on no one wanted them.

They had very unique maintenance demands - but as Air India is renowned for maybe not doing so much maintenance anyways - it was a perfect fit.

Something was better than nothing.

And conditional retrospective discounts are not disclosed.

IAHObserver wrote:

Do what Delta did and place a massive order with Embraer for the new turboprop.

you can't drop a bomb like that without a link and a dedicated thread???

I’ve been mulling over this for a while now and whilst I 100% agree that it will be a cold day in hell before MOL orders Airbus, I can’t stop wondering about what his long-term plans are for Ryan Air.

We assume he wants the 10’s to increase capacity without taking up another slot and we assume the alternative to the 10 would be the A321 due to it having a similar capacity. But what if he is eying Jet Blue’s recent venture into low cost trans-Atlantic travel flights? Could this be done with the Max 8-200’s? or would he need both the extra range and thrust of the Airbus to operate trans-Atlantic flights, especially from secondary airports with shorter runways.

Just to be clear, I don’t expect MOL to order an Airbus anytime soon, but if there ever was a reason for him to do so, then low cost transatlantic would be it. And having had the unfortunate experience of many a Delta 757* LBA-EWR and MAN-EWR flight, then they really wouldn’t have to offer much to beat the competition, before factoring in ticket price.

* I know it’s an act of sacrilege here to insult the 757, I remember the almost daily threads demanding Boeing restart production as nothing could ever replace it …EVER! ...Please forgive me.

Ryanair has always been a shark when it comes to plane orders, smell blood and get good prices. But this time Boeing is hitting from a strength standpoint on the MAX10. With a constantly growing MAX order book, there is no need to sell the farm. If anything BA is going to recoup as much as profit as they can cause of the 787 idleness.

Daysleeper wrote:

Just to be clear, I don’t expect MOL to order an Airbus anytime soon...

But why not? All these talks that Airbus do not want to sell to Boeing are old now. More recently just before pandemic hit, Ryanair bought Lauda and we're talking about buying Airbus for them. So I'm not sure why Airbus is so discounted here.

If Airbus and Boeing want to form a two company cartel to show who is boss they only need to use Ryanair as a whipping boy.

Ryanair cannot go airbus for their business plan, they copied Southwest. So Boeing, even in it's current predicament might think they should actually carry through with this for the long term.

Michael O'Leary has always been a vulture circling.

I'm guessing Boeing will fold though. I'd love them not to though ....

miegapele wrote:

But why not? All these talks that Airbus do not want to sell to Boeing are old now. More recently just before pandemic hit, Ryanair bought Lauda and we're talking about buying Airbus for them. So I'm not sure why Airbus is so discounted here.

Price. Even if we ignore the past unpleasantness between the Airbus sales team and Mol I don’t see any motivation for them to offer the discount required to compete against Boeing. As I said above the only way I could ever see it happening is if they need the range and/or thrust to offer low cost trans-Atlantic.