Ryanair bite back at Boeing over craft costs

Thursday, 5th November 2009

Ryanair, UK’s leading budget airline, has made a firm statement to Boeing that it would need to cut costs if it planned to continue growth. Ryanair are currently close to becoming the largest airline in Europe, as they have managed to

stay ahead of the game during the worldwide recession, while so many other airlines have been forced to reduce their services.

However, in order to continue expansion, Ryanair will need to appoint extra planes. Up until now the airline has had a close relationship with US aircraft manufacturer Boeing. However, this week Ryanair admitted that talks with Boeing

regarding the order of 200 aircraft for 2013-16 delivery have hit a wall.

In a recent press statement, Michael O'Leary, chief executive of Ryanair said that: "We see no point in continuing to grow rapidly in a declining yield environment, where our main aircraft partner is unwilling to play its part in our

cost reduction programme. If we cannot invest our surplus cash efficiently in new aircraft, then we should distribute it to shareholders.”

It appears that Boeing need to make their offer more attractive if they want to keep the Ryanair account. According to recent reports, O’Leary has also been in talks with Airbus, who may be able to make him a better offer.

O’Leary has gained a reputation in the airline industry for driving hard bargains and cutting costs wherever possible. Although these tactics have enabled the company to expand so far, analysts are suggesting that they may soon have to

rethink their strategy.

As Gert Zonneveld from Panmure Gordon pointed out: "It's difficult to see how they can keep squeezing costs out of the business. At the end of the day, you need your two pilots, you need a number of crew per aircraft.”

← Purple Parking provides new service at Manchester Airport
→ American Airlines triumphs at British Travel Awards
↑ November 2009 news index

Compare Airport Parking & Hotels