Ryanair - orders strategy

[Peter Mugridge]

The April issue of Air Britain News ( physical magazine, so no link... ) contains an interesting snippet on page APR 664.

Ryanair plans to order several dozen A320s to expand the Lauda Air fleet to 50, with existing leases being extended in the interim. Deliveries of the new aircraft are expected from 2030.

In the same item, it is mentioned that Michael O'Leary is meeting senior Boeing executives in Dublin ( i.e. he has made them come to him rather than him going to see them ) to discuss the prolonged delays to 737 MAX deliveries.

Given that previously the indications have been that the Lauda Air A320 fleet would be phased out, I wonder if this decision to order new A320s for it, combined with this meeting in Dublin, is Ryanair's way of putting pricing pressure on Boeing? A sort of warning shot across the bows?

 

[Donny Dave]

I would have thought this has very little to do with the price of the Boeings, more to do with the ongoing concerns and problems with safety with the 737 MAX variants.

 

[YorkRailFan]

Airbus previously said this in 2009:

Airbus has snubbed an effort by Ryanair, the low-cost airline, to draw it into a bidding contest against Boeing for the carrier’s next multi-billion dollar order for several hundred short-haul jets.

The European aircraft maker is unwilling to contemplate the scale of discounts being sought by Ryanair, which has established a reputation as one of the most aggressive negotiators of low-cost supply deals in the global aviation industry.

Airbus’s reluctance to enter the preliminary bidding for the Ryanair order is highly unusual given traditionally fierce competition between the world’s duopoly manufacturers of big commercial jets above 100 seats.

The two group’s vie for the annual bragging rights as the world’s leading commercial aircraft maker – a position held by Airbus – and the order volumes from Ryanair, if not the profits, represent a very big prize given that the Irish carrier is poised to become Europe’s biggest short-haul airline measured by passenger numbers.

This week Ryanair said that it was in early talks with Boeing and Airbus about an order for 300-400 short-haul jets, one of the biggest purchases of new aircraft.

Michael Cawley, Ryanair deputy chief executive and chief operating officer, said that he expected the group to place the order within 18-24 months to take advantage of the rapidly weakening commercial aerospace market.

Michael O’Leary, Ryanair chief executive and key senior colleagues have visited Airbus headquarters in Toulouse to outline their plans, but the European group, the commercial aircraft division of EADS, has told the airline that it is not interested at the prices Ryanair is seeking.

John Leahy, Airbus’s chief commercial officer, said: “We are not in discussions with Ryanair about aircraft. That is on the record. We don’t have plans to enter a sales campaign with Ryanair, which would be very expensive and very time consuming.”

Airbus snubs Ryanair over discounts

www.ft.com

I would have thought this has very little to do with the price of the Boeings, more to do with the ongoing concerns and problems with safety with the 737 MAX variants.

But in 2020, during the height of the MAX grounding, Ryanair cancelled the leases for the A320s at Lauda, cutting them short.

 

[edwin_m]

I would have thought this has very little to do with the price of the Boeings, more to do with the ongoing concerns and problems with safety with the 737 MAX variants.

And in particular the uncertainty on Boeing delivery dates as a result. I guess Ryanair could subcontract some flights to Lauda in the same way as Easy does with the likes of Smartlynx, to continue their expansion without having to train their own crews up on A320s.

 

[Peter Mugridge]

I guess Ryanair could subcontract some flights to Lauda in the same way as Easy does with the likes of Smartlynx, to continue their expansion without having to train their own crews up on A320s.

I see quite a few Lauda flights over here which all show up as Ryanair flight numbers on Flight Radar 24, and operating typical Ryanair routes, so I suspect they probably already do this to some extent?

 

[Blindtraveler]

Wonder what the interior of a fully ryanairized 320 would look like, somehow. I still think it would be a better product overall for both passengers and crew. I've not tried a Max but I have little time for anything that Boeing make these days

 

[Snow1964]

In recent years Ryanair have waited to lulls in aircraft orders (and most recent one was during covid when many planes were idle) then ordered big numbers in one go with hefty discount off the unpublished list price. (I think most covid time order was 200 planes). Just over year ago ordered 737max10 planes for 2027-2032 delivery (150 firm, and 150 options). These are new bigger and currently uncertified variant.

They then sell them off before they need major overhauls. In their previous order (about decade ago) their big order was too many, so some were sold off before being built to other airlines, and Ryanair sold them on for more than they were paying Boeing (because others couldn't get build slots and/or decent discounts).

Lauda Air was separate before Ryanair acquired it, and used A320s. There is now massive ordering backlogs, and very few built slots this side of 2031 (for both 737max and A32x neos).

A couple of weeks ago Airbus announced that it was converting one of the production lines at Broughton into extra semi-automated A320 wing production facility, so looks like they are trying to ramp up A320 production.

Meanwhile Boeing is still having 737max production problems and about dozen new planes that should have been available for summer season have not yet been delivered to Ryanair (they are still trickling in, but Ryanair has had to cut planned schedules). And of course Ryanair dumps anywhere that puts up prices (so it's Bordeaux base is closing in November).

Of course he doesn't need to summon Boeing executives to Dublin to buy more A320s from Airbus. Almost certainly it is to do with the 737-10 (the bigger planes that are on order). With all that has come out of the groundings of recent crashes, the US regulator has discovered a culture of cover up of errors and Boeing self certifying some processes, so going into minute detail on the 3 new Boeing aircraft (the big 777-X, the 737max7 and 737max10), all of which are heavily delayed being certificated.

There is lot of ping pong of which order to do these in, big intercontinental airlines are pushing for 777-x (first ones were ordered over 11 years ago and are at least 5 years late), the small 737max7 (and lot of US airlines need this to replace old aircraft) or stretched 737-10 (including Ryanair), but this one is near back of certification queue (and some have suggested Boeing could cancel it)

My take is that Ryanair knows that 737-10 is going to be very late (or not at all) and it will be stuck with a fleet that cannot carry more than 198 passengers, when many other European carriers are getting 240 seat planes. They have ordered 150 firm (and 150 options) that were supposed to be delivered 2027-2032, so would have big gap if they don't arrive, or are years late.

 

[Cross City]

Wonder what the interior of a fully ryanairized 320 would look like, somehow. I still think it would be a better product overall for both passengers and crew. I've not tried a Max but I have little time for anything that Boeing make these days

I find the Ryanair Max's probably the most comfortable budget airline ride available in Europe.

 

[GRALISTAIR]

I see quite a few Lauda flights over here which all show up as Ryanair flight numbers on Flight Radar 24, and operating typical Ryanair routes, so I suspect they probably already do this to some extent?

Is this a “wet lease” arrangement?

 

[Cross City]

Is this a “wet lease” arrangement?

Technically yes, but Lauda are a fully owned subsidiary of Ryanair.

Same goes for Buzz, Malta Air and Ryanair UK.

 

[Peter Mugridge]

Technically yes, but Lauda area fully owned subsidiary of Ryanair.

Same goes for Buzz, Malta Air and Ryanair UK.

...and all three variations can and do work the same Ryanair flight number across a given week!

 

[Bald Rick]

In recent years Ryanair have waited to lulls in aircraft orders (and most recent one was during covid when many planes were idle) then ordered big numbers in one go with hefty discount off the unpublished list price. (I think most covid time order was 200 planes). Just over year ago ordered 737max10 planes for 2027-2032 delivery (150 firm, and 150 options). These are new bigger and currently uncertified variant.

They then sell them off before they need major overhauls. In their previous order (about decade ago) their big order was too many, so some were sold off before being built to other airlines, and Ryanair sold them on for more than they were paying Boeing (because others couldn't get build slots and/or decent discounts).

Lauda Air was separate before Ryanair acquired it, and used A320s. There is now massive ordering backlogs, and very few built slots this side of 2031 (for both 737max and A32x neos).

A couple of weeks ago Airbus announced that it was converting one of the production lines at Broughton into extra semi-automated A320 wing production facility, so looks like they are trying to ramp up A320 production.

Meanwhile Boeing is still having 737max production problems and about dozen new planes that should have been available for summer season have not yet been delivered to Ryanair (they are still trickling in, but Ryanair has had to cut planned schedules). And of course Ryanair dumps anywhere that puts up prices (so it's Bordeaux base is closing in November).

Of course he doesn't need to summon Boeing executives to Dublin to buy more A320s from Airbus. Almost certainly it is to do with the 737-10 (the bigger planes that are on order). With all that has come out of the groundings of recent crashes, the US regulator has discovered a culture of cover up of errors and Boeing self certifying some processes, so going into minute detail on the 3 new Boeing aircraft (the big 777-X, the 737max7 and 737max10), all of which are heavily delayed being certificated.

There is lot of ping pong of which order to do these in, big intercontinental airlines are pushing for 777-x (first ones were ordered over 11 years ago and are at least 5 years late), the small 737max7 (and lot of US airlines need this to replace old aircraft) or stretched 737-10 (including Ryanair), but this one is near back of certification queue (and some have suggested Boeing could cancel it)

My take is that Ryanair knows that 737-10 is going to be very late (or not at all) and it will be stuck with a fleet that cannot carry more than 198 passengers, when many other European carriers are getting 240 seat planes. They have ordered 150 firm (and 150 options) that were supposed to be delivered 2027-2032, so would have big gap if they don't arrive, or are years late.

Good assessment, in my opinion.

 

[mpthomson]

Wonder what the interior of a fully ryanairized 320 would look like, somehow. I still think it would be a better product overall for both passengers and crew. I've not tried a Max but I have little time for anything that Boeing make these days

The MAX is nicer to fly on than any other jet of a comparable size. The Airbus NEOs get close but the MAX is still better for general cabin ambience and certainly volume.

 

[YorkRailFan]

The MAX is nicer to fly on than any other jet of a comparable size. The Airbus NEOs get close but the MAX is still better for general cabin ambience and certainly volume.

The NEO actually has a wide cabin that the MAX.

 

[WestCoast]

...and all three variations can and do work the same Ryanair flight number across a given week!

There‘s actually five operating carriers in the group now. Buzz with Polish registered aircraft, Lauda Europe with Maltese registered, the original Ryanair DAC with Irish aircraft, Ryanair UK, and Malta Air. Most of planes wear the original Ryanair livery with only a few in Malta Air and Buzz colours, although Lauda is all in their own colours. You might remember Buzz being KLM’s low cost carrier they took over in the early 00s, now reincarnated in Poland

I am not sure they have any routes where every single one of those operates it, although I reckon routes out of Vienna are most likely as there’s Buzz, Malta Air and Lauda all based there. Stansted - Vienna appears to have services from Malta Air, Lauda, Ryanair UK and Ryanair DAC this summer, although no Buzz.

 

[Peter Mugridge]

I am not sure they have any routes where every single one of those operates it

FR2518 from Stansted to Budapest is a good contender to randomly get at least three of them; in the past couple of weeks it's had Ryanair ( main ), Buzz and Malta Air operating it - screenshot below from Flight Radar 24. I've seen the other two operating to Stansted from the south westerly routes, so one of those routes is a strong contender for the possibility of a full house.

Which makes the order strategy even more interesting given that a couple of years ago we were all expecting teh Lauda Airbus fleet to be phased out and replaced with the standard 737 equipment...