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- Ryanair, one of Boeing’s biggest customers, has said it is ending talks about ordering 737 Max 10 jets.
- Ryanair CEO Michael O’Leary said the companies had not reached a price agreement.
- Boeing is trying to restore confidence in the Max, grounded for 20 months.
Boeing faces deadlock with one of its biggest customers after Ireland’s Ryanair said it ended negotiations to buy tens of billions of dollars worth of 737 Max 10s due to price differences.
The rare move to go public with the big-ticket negotiations comes after months of wrangling that had already delayed a deal for the larger version of the 737 Max when Ryanair ordered a smaller model again in December.
A major new order from Ryanair would give the US aircraft manufacturer a boost as it restores confidence in the Max, which stood still for 20 months until November after two fatal crashes. It would also speed up an interim recovery of the industry after the COVID-19 pandemic.
Europe’s largest low-cost carrier is already the region’s largest Max customer, with 210 of the 197 Max 8-200 seats on order. It suspended a new order worth a potential $ 33 billion at list prices for up to 250 of the 230 Max 10 seats.
Even after steep discounts across the industry, such a deal would still be worth well over $ 10 billion, analysts say.
But last week Ryanair Group CEO Michael O’Leary threw cold water on the chances of a quick deal, saying he would be surprised if a deal were reached this year.
On Monday, he said the talks had collapsed.
“We are disappointed that we were unable to come to an agreement,” O’Leary said in a statement. “However, Boeing has a more optimistic view of aircraft prices than we do, and we have a disciplined record of not paying high prices for aircraft.”
The company added that “it became clear that the price gap between the partners could not be closed and, therefore, the two sides agreed not to waste any more time on these negotiations.”
A Boeing spokesperson said Ryanair was a longtime partner.
“We value their business and are committed to supporting them,” the spokesperson said. “At the same time, we continue to be disciplined and make decisions that make sense to our customers and our business. “
O’Leary downplayed prospect of defection from Airbus
While Ryanair has theoretically ended the talks, analysts have said he’s betting public pressure will draw Boeing to the table with an improved offer as the aircraft maker juggles the fallout from the Max crisis, uncertainty over COVID-19 and industrial problems.
Boeing, however, seems to believe the market is finally moving in its direction after winning a string of orders including 150 Max 10 from United Airlines.
Industry experts say Ryanair is one of the two mainstays of the budget alongside Southwest which can insist on Boeing’s best prices.
The spread of COVID-19 variants and public acceptance of the Max will help determine if prices still have room to come down or if Ryanair, one of the toughest negotiators in the industry, has missed the bottom of the market for the largest model Max.
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