Ryanair issues another ‘ultimatum’ to Boeing on aircraft orders

Ryanair, the low-cost carrier based in Dublin, the capital of the Republic of Ireland, has said it wait till the end of November 2009, or at the most “very early” December 2009, to reach an agreement with Boeing Company on a fresh batch of orders for Boeing planes.

But, if no preliminary agreement is reached around the end of the November 2009, which will give time to sign a formal agreement by the end of 2009, the airline will end its long-standing relationship with Boeing Company, Michael O’Leary, chief executive of Ryanair, has warned.

In fact, Michael O’Leary – who is known in the aviation-industry circles for his ability to make what analysts call “hard bargains” – had cautioned Boeing Company earlier in November 2009 itself that negotiations on ordering as many as 200 planes for delivery during 2013-16 had not progressed as desired, which could decelerate the fast growth of Ryanair by 2013.

In his characteristic tough-talk, O’Leary told reporters at a news conference in Dublin that he “will not be wasting another Christmas holiday trying to talk to guys in Seattle” and that a deal is “highly unlikely.” (Seattle is the home base of Boeing Company).

According to aviation-industry observers, Ryanair is seeking bigger concessions on price from Boeing Company for purchases of the Boeing 737 aircraft in future.

O’Leary also reiterated that he might deviate from his policy of not paying dividends, by “returning cash to shareholders” in 2011 since Ryanair’s ongoing capital investment plan would come to a close by that time.

From the middle of 2011 to the end of 2011, Ryanair will try to pay “very substantial bonuses” to the senior management personnel as well as dividends to shareholders, O’Leary added.

Reacting to the “warning” by Michael O’Leary on possible ending of dealings with Boeing, a spokesman of Boeing Company was quoted by the media as saying that Ryanair is a “valued customer” of the aircraft maker and that the company cannot comment on any talks it might have with its customers.

Meanwhile, Ryanair announced in a statement that that it will launch new flights, from March 2010, connecting John Lennon Airport in Liverpool, in north-west England, with 3 cities in Europe.

The 3 planned services from Liverpool are to Lodz, in Poland; Rimini, on the east-coast of Italy; and Trapini, in the island of Sicily in Italy. These new flights will bring Ryanair’s total number of destinations from the Liverpool area to 44.

Ryanair also said it will base 2 new Boeing 737-800 aircraft at John Lennon Airport in Liverpool.

At present, Ryanair operates a fleet of 202 Boeing 737-800 aircraft, which have been built at Boeing’s factory in Renton, Washington, the United States.