DUBLIN (Reuters) – Ryanair (RYA.I) aims to conclude talks with Boeing (BA.N) on a new plane order in the next two weeks, but possible price cuts or cancellations related to an existing 737 MAX order are also part of the discussions, its chief executive said on Friday.
FILE PHOTO: Ryanair Chief Executive Michael O’Leary attends the Europe Aviation Summit in Brussels, Belgium March 3, 2020. REUTERS/Johanna Geron
Ryanair, which has 210 737 MAX jets on order, has given Boeing a deadline of May 18-19 to secure a “comprehensive new agreement,” Michael O’Leary told Reuters in an interview.
Ryanair in February said it had made an offer for an order of the MAX 10, which has 230 seats compared with 197 on the MAX200 jets it has already ordered.
“We are in advanced stage of those discussions. The focus is on taking the MAX delivery and the possibility of a new aircraft order,” he said. “Pricing is part of the discussion, cancellations are part of the discussion.”
Deliveries of the MAX jets have been repeatedly delayed due to its grounding a year ago in the aftermath of two fatal crashes.
Ryanair, which on Friday announced 3,000 job cuts and struck a pessimistic tone on the length of coronavirus disruption, is making the argument that the blow to profitability dealt by the health crisis meant it needed cheaper planes.
“We are facing the reality that we will be flying a lot less passengers in the next 12 months and over the next 2-4 years we’ll be flying a lot more passengers but at much lower prices and that is going to have to be reflected in lower aircraft costs,” O’Leary said.
The CEO said he believed the grounded MAX would be back flying by July or August and that he expected Ryanair to take its first deliveries of the plane by next summer.
“I would be very optimistic that we would have some MAXs next summer, the question is whether we will have 30 MAXs or 10. At this stage I am not quite sure.”
Asked whether the coronavirus crisis would undermine Ryanair’s long-term growth plans, O’Leary said those plans “were always going to go back on track.”
O’Leary said Boeing’s raising of $25 billion in a bond offering on Thursday “removes any doubts about Boeing’s survivability.”
Reporting by Conor Humphries; editing by David Evans and Mark Potter