alnis
Jan 8 2010, 09:51 PM
http://www.fool.com/investing/general/2010...gs-90-drop.aspxReuters is reporting that talks are on again
QUOTE
Even better, we learned yesterday that one of Boeing's bigger sales opportunities -- one which seemed permanently grounded as recently as last month -- now appears to be back on life support. According to Reuters, Ryanair (Nasdaq: RYAAY) CEO Michael O'Leary is suggesting that if Boeing can sweeten the deal on a planned 200-plane order, he might be willing to help Boeing plump up its order book.
Article from Motley Fool discusses other aspects of Boeing also. See link for full story.
Stitch
Jan 8 2010, 10:38 PM
Well the deal is worth a good bit more than Boeing's entire 2009 order intake (in terms of units), so maybe Boeing is willing to loosen up whatever conditions they had demanded that soured MOL on the original negotiations and led him to stop talks.
DAL767-400ER
Jan 8 2010, 11:47 PM
Wasn't MOL's b!tching mostly about delivery slots though? Sure, the order might make Boeing more money than all the planes they sold last year, but then again, given how full the 737 backlog still is, I doubt it is all that easy for Boeing to just find the delivery slots that FR wants, not to mention that I doubt Boeing would have much interest in seeing FR flood the market with 7-year old used 738s and thus steal potential orders that would otherwise end up directly in Boeing's backlog.
Stitch
Jan 9 2010, 12:44 AM
Well even Aboulufia thinks Boeing is going to have to reign back 737 production to the low 20's in 2010, so if FR wants planes now, I am sure Boeing would be ecstatic to meet their request. But then, FR darn near has 200 unfilled orders and options with Boeing and they said they're happy with the price Boeing offered, so I really wonder what, exactly, FR wants that Boeing won't give.
Stitch
Jan 9 2010, 04:40 PM
The
Gerson Lerman Group has published an analysis of why they feel FR will come back to Boeing.
QUOTE
Much will be made of Ryanair’s decision not to place an order for up to 200 jets. As we know, Boeing and Ryanair had agreed on price. So what happened?
Double-booked 737 slots appear to be the driver behind this decision.
Ryanair mentioned in its half year earnings that revenue per passenger was down 15%. The airline has early build, high cycle 737-800s that it wants to replace. Many of those potential 200 jets would have been earmarked for this purpose. Ryanair still has around 100* Boeing 737-800s yet to be delivered.
Give the deferral of 737s Boeing has seen since mid-2008, many of these airplanes will be delivered in the timeframe (2012-16) that Ryanair had wanted to start taking deliveries...Boeing has a healthy backlog on the 737, the fact that Ryanair couldn’t agree on delivery dates shows that Boeing has other customers ready to spend money to pay for those slots. Ryanair will have extreme difficulty in securing those slots, even if one or a handful of other customers defers, other carriers will step in and acquire them quickly – primarily because those that want delivery will pay the premium for it – a premium Ryanair has thus far avoided.
It kind of sounds like those who have speculated FR was hoping to quickly "flip" their new 737-800s on the open market might be at least partially on the right track.
Boeing apparently feels demand for new-build 737-800s will recover soon enough to prevent them from having to cut production (as every aerospace analyst is adamant they will have to do) and Boeing doesn't want FR "stealing" slots from them.
kimshep
Jan 10 2010, 01:23 AM
Either that .. or ..
Despite the current GFC, Boeing still holds a handsome and valuable backlog of B737-800 orders. Far better to exercise builds for 'high profit' orders first .. rather than try and schedule delivery programs, in order to accommodate (and even 'prioritise') MOL's - lower profit - orders ahead of others. The 'lower' the profit for each individual frame, the more they risk becoming 'back-fill' orders, when times and production slots are scarce.
robertkc
Jan 11 2010, 11:44 PM
I don't think Boeing will come back to the table. The reason the deal didn't get done had nothing to do with delivery slots, it had to do with residual value guarantees that Ryanair were demanding.
They, as like other LCCs, are now very concerned about ordering current narrowbody products with so much uncertainly surrounding the plans that Airbus, Boeing (and others) have in regards to narrowbody offerings arriving between 2015-2025, with the prospect of open rotor or other technologies combined with a ground up redesign pretty much making the current narrowbody products obsolete the instant these products come out.
In addition to that, as I've said before, Boeing owe Ryanair nothing - quite the contrary - it's an embarrassment to be associated with such a distasteful airline and their fast and loose treatment of safety standards. The backlog is more than sufficient, and as Kimshep pointed out, those in the backlog (apart from Ryanair's current orders of course) are at least profitable.
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