Ryanair walk away from Boeing deal
17.12.09
Ryanair has axed a planned order for 200 Boeing 737s after failing to reach an agreement with the US plane manufacturer. The budget airline said agreement had been reached on pricing for the new aircraft for delivery in 2013-16, but Boeing was 'unwilling to incorporate some other terms and conditions from our existing agreement into this new aircraft order' - which sounds like a request for a retrospective discount on its current order.
The airline said the breakdown of negotiations would not affect plans to take delivery of 112 737-800s during the next 3 years - 2010 (48), 2011 (37) and 2012 (27) - to sustain passenger growth over the medium term. However, it now plans to 'significantly reduce growth and capital expenditures' in order to 'maximise cash balances' for distribution to shareholders during the period 2012-2015.
Ryanair CEO Michael O’Leary said: 'We made it clear to Boeing that we will not order aircraft if we believe that either the pricing or the other contractual terms and conditions will be inferior to those we currently enjoy, as this would not be a wise or sensible use of shareholders funds. We have no plans to reopen discussions with Boeing or any other aircraft manufacturer.'
Shareholders would be briefed in the first quarter of the new year with a revised strategy, he added. We take this to mean that he has not given up hope of reaching an agreement......!
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