Boeing’s CEO is “confident” the company will fulfil Ryanair’s giant 737 MAX-10 order announced Tuesday despite lingering supply chain and regulatory questions, a view shared by the Irish carrier.
The two companies unveiled a massive agreement of 150 new planes, plus options of 150 more to be delivered between 2027 and 2033 in a deal worth more than $40 billion at list prices, which are customarily rebated for large orders.
In a joint interview with AFP, the leaders of the two companies described the financial terms as “win-win” following a complex negotiation.
When Boeing presented its longterm outlook last November, the American manufacturer anticipated the logistics difficulties that have dogged the industry during the pandemic “would improve themselves over the next two calendar years, 2023 and 24,” said Boeing Chief Executive Officer Dave Calhoun.
“And that is what’s been happening,” he said.
Boeing was faced with a fresh issue in April with the discovery of a problem with a part provided by MAX supplier Spirit AeroSystems that has delayed deliveries heading into summer.
“We regret every small incident,” Calhoun said, adding “we did contain it quickly.”
Ryanair chief Michael O’Leary praised Boeing’s “progress” over the last 12 months.
“At this time last year, we were short about 20 aircraft through the peak summer period,” O’Leary said.
While Boeing will be a month or two late on some of the 51 scheduled new plane deliveries for this summer, “we’re pretty much there,” O’Leary said.
– ‘Frustrating’ –
O’Leary acknowledged that new problems can be “frustrating,” but said both Boeing and Airbus “have done a terrific job of repairing what was a very fractured supply chain challenge post-Covid.”
Calhoun characterized the Federal Aviation Administration’s certification process for the MAX-10 as on track.
“No technical issues have arisen such that there’s a concern that we won’t be able to resolve,” Calhoun said. “It’s documentation, documentation, documentation.”
O’Leary said there are “no issues” with the MAX-10 from either the FAA nor its European counterpart.
During a press conference earlier Tuesday, the two executives bantered about the financial terms.
“We’re paying a slightly higher price per seat on these new aircraft” compared with older versions, O’Leary said.
But the MAX-10’s improved fuel efficiency and greater passenger capacity — with 30 additional seats — “allows us to share some of that upside with Boeing,” O’Leary said. “And it becomes a win-win for both of us.”
While the final agreement includes a rebate for Ryanair, the Boeing chief said it also represented a good deal for the US company.
“We wouldn’t take the order if we couldn’t make a profit,” Calhoun said.
While there has been talk about Boeing developing a new plane model, O’Leary said the industry is primarily focused on improving fuel efficiency in engines and achieving low-carbon transport, particularly in Europe, where there are stiffer environmental rules.
“The demand for travel across Europe is buoyant,” O’Leary said, adding that prices are on track to rise by double digits again this summer.
“Pricing is stronger, as an industry, that we’ve ever seen before the last 10 or 20 years,” he said.
The Irish carrier is targeting volume of 300 million passengers annually in March 2034 compared with 168 million this year, with the MAX-10 playing a key role.
That goal should be doable “as long as we can persuade a few of the (French) air traffic controllers over there to stop striking on a frequent basis,” O’Leary said.
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