Ryanair’s CEO once called Boeing’s leadership ‘headless chickens.’ Now he wants to buy the Max jets that U.S. airlines don’t
Ryanair CEO Michael O’Leary called Boeing’s management “headless chickens” in May 2022, but now he says, “They are doing a good job. They are turning that company around.”
In fact, Ryanair is interested in purchasing unwanted Boeing 737 Max 10 aircrafts from United Airlines, O’Leary said in Ryanair’s third quarter earnings presentation Monday.
“If United Airlines wants to delay or cancel any of their Max Boeing 737 orders, Ryanair would be very happy to take them,” he said.
The CEO expressed belief in Boeing following inspections of the Max aircraft recently grounded after a door flew off an Alaska Airlines model that had just taken off “I think safety is their No. 1 byword,” O’Leary said on the call. “I have a lot of confidence both personally and professionally in [Boeing CEO] David Calhoun and in [CFO] Brian West.”
Ryanair clipped its after-tax profit forecast for the year at the end of March to between 1.85 billion and 1.95 billion euros ($2 billion to $2.1 billion), down from 1.85 billion to 2.05 billion euros, citing higher productivity pay and lower load factors. The airline needed to drop prices and fill seats in December after travel sites such as Booking.com, Kiwi, and Kayak removed Ryanair flights from their websites, which CFO Neil Sorahan said contributed to a lower load factor.
O’Leary said Ryanair was also impacted by Boeing production delays. They were originally contracted to receive 57 aircrafts.
“We are pushing very hard with the entire Boeing team to ensure we get at least 50 aircrafts by the end of June,” O’Leary said.
Airlines’ anger with Boeing
Ryanair has at times kept faith with Boeing after past crises. In December 2020, Ryanair bought 75 Boeing Max jets, the manufacturer’s largest order since a March 2019 grounding and two fatal crashes that killed 346 people. Traders said Ryanair could have gotten a discount of 50% of listed prices, though Ryanair did not disclose the price of the 2020 deal.
But the discount airline has not always supported its sole supplier through tough times. Ryanair experienced aircraft delivery delays from Boeing before, including the May 2022 delays that prompted the “headless chicken” comment. In September 2021, Ryanair publicly confronted Boeing about the aerospace giant not agreeing to Ryanair’s named price on an order of 737 Max 8 jets.
His American counterparts at both Alaska Airlines and United Airlines have been outright angry over Boeing’s manufacturing issues. United Airlines CEO Scott Kirby said that Boeing needs to take “real action” to improve quality, while his airline revealed on Jan. 22 that they expect to lose money in the first quarter due to Boeing 737 Max 9 groundings. Alaska Airlines demanded a minimum $150 million reimbursement in losses from Boeing after a door plug flew off Alaska’s Flight 1282 Boeing 737 Max 9 aircraft on Jan. 5, and CEO Ben Minicucci said the airline found many additional loose bolts on other grounded 737 aircrafts. “I am more than frustrated and disappointed. I am angry,” Minicucci said in a “NBC Nightly News” interview that aired Tuesday.
Southwest Airlines also has grievances against Boeing. It took 737 Max 7 planes out of their fleet plans because of Boeing’s supply chain issues and certification delays by the Federal Aviation Administration. It expects to receive 79 of the 85 originally contracted aircrafts.
Boeing flights resume
After a month of disasters, Boeing 737 Max 9 aircraft are able to get off the ground again.
United Airlines resumed Max 9 flights on Saturday, and Alaska Airlines cleared some Max 9 flights on Friday afternoon following inspections.
Delivery delays are exacerbated by the FAA’s freeze on Boeing 737 Max production increases, which prevents the manufacturer from growing its output of its best-selling aircraft past 38 jets per month, a Boeing spokesperson told Fortune. A Bank of America Securities report released Monday underlined the impact the production increase freeze and delays could have on Boeing, as customers begin to look elsewhere for aircrafts.
“We think it is unlikely that customers will break their contracts and cancel orders (as this would result in a charge to the customer); however, we do think that these customers may use the delay as a reason to look elsewhere for future aircraft needs,” analysts wrote.
Ryanair reiterated Thursday that it supports the FAA’s freeze and that the production increase halt would not further delay deliveries to Ryanair.
“Ryanair also welcomes the FAA’s decision to postpone Boeing’s proposed monthly production rate increase which will allow Boeing the time and space to improve quality control of the aircraft it currently manufactures,” Ryanair said in a statement to Reuters.
