Ryanair Group CEO Michael O’Leary putting pressure on Boeing over delays to deliveries of the 737 MAX highlights the planemaker’s issues further. Welcome to The Sunday Column.
Earlier this week, the prolific leader of the Irish low-cost carrier threatened to scrap it’s orders with the American manufacturer following significant production and delivery delays.
The question to ask looking at this is: Will O’Leary actually go that far, or is it just being used as a pressure tactic to scare Boeing?
Delivery Delays with the Boeing 737 MAX…
Delivery outlook for the Boeing 737 MAX has been cut again, and was announced by the American planemaker in their third-quarter results that were released not too long ago.
It mentioned the following within this:
“On the 737 program, during the quarter a supplier non-conformance was identified on the aft pressure bulkhead section of certain 737 airplanes.”
“This is not an immediate safety of flight issue and the in-service fleet can continue operating safely.”
“Near-term deliveries and production will be impacted as the program performs necessary inspections and rework, and the company now expects to deliver 375-400 airplanes this year.”
Such issues with the aft pressure bulkhead section of the Boeing 737 MAX resulted in a deal being signed with Spirit AeroSystems to enhance the quality and delivery numbers of that particular part of the jet.
Despite such deals, Ryanair’s Group CEO Michael O’Leary mentioned to The Telegraph that the American planemaker needs to “get it’s **** together” and address the ongoing issues:
“Boeing needs to get its act together and start delivering these aircraft on time. I had a lot of sympathy for Boeing.”
“The Max was grounded for two years but that was two years ago. It’s time for them to get their s**t together and start delivering these aircraft”.
O’Leary even went as far as blaming the delivery delays as the reason for cutting their autumn and winter scheduling, as they intended on using the new aircraft for new routes.
Would O’Leary Actually Cancel The Airline’s Order?
At this stage, it is unclear whether O’Leary would go as far as opting to scrap the rest of the Boeing 737 MAX aircraft that the airline has on order.
If he was to do that, then that would be quite the change of tact compared to what he did back in May for the airline.
Ryanair placed a major order for up to 300 Boeing 737 MAX 10 aircraft, of which such deliveries are due to take place between 2027 and 2033.
Such an order was also part of his objective to achieve 300 million passengers annually by March 2034.
So, if he was to cancel the order, then he would have to look for a sound alternative that would align better to his plans. But currently, O’Leary doesn’t really have much of an alternative.
Over the last 18 months, O’Leary’s position on aircraft pricing and choice has been quite interesting to say the least.
Back in April 2022, he said to Richard Quest at CNN that Boeing needed more customers in Europe, and that he would be open to an order with Airbus, but only if there was a 10% discount on this.
By July of that year, he took the decision to renew the leases of the Airbus A320s in the Lauda fleet, of which the Ryanair Holdings Group owns that airline. But within that, he also lambasted Boeing for pricing of aircraft, so attacking both sides at that point.
However, in April of that year, O’Leary restarted talks with the American planemaker, and then the month after, another order was announced. So at this stage, who knows what he would want to do?
That, within itself, is probably the beauty of O’Leary and why he has been successful over all these years. His unpredictability creates this significant presence of being able to apply pressure wherever and whenever he wants.
Too Much at Stake?
What remains clear is that Boeing is under a lot of pressure at the moment to address the continued delays to the Boeing 737 MAX program, and that the words from O’Leary probably add fuel to that fire.
There is quite a lot at stake for both sides. If Ryanair decides to scrap their orders, then that is a big blow for the American planemaker’s presence in Europe.
However, on the flip side, that would also leave O’Leary with quite the hole to fill, especially if they intend on serving 300 million passengers per annum by 2034.
It will be interesting to see whether this is all words, or whether the prolific CEO would go that far to make a point. Because as we know, his unpredictability does have no bounds because that is what makes him such a successful leader.
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