Ryanair (RYAAY) ended negotiations for a major Boeing 737 Max deal over pricing and delays continue with the Boeing 787 Dreamliner over an inspection issue. Boeing stock fell Tuesday.
“We are disappointed we couldn’t reach agreement with Boeing on a Max 10 order,” Ryanair CEO Michael O’Leary said in a statement. “However, Boeing have a more optimistic outlook on aircraft pricing than we do, and we have a disciplined track record of not paying high prices for aircraft.”
O’Leary also said that Boeing‘s (BA) high prices could be why Delta Air Lines (DAL) and other Boeing customers have opted for Airbus (EADSY) orders in recent months. Delta ordered 30 A321 jets in August as a follow-on to its 25-jet order in April. It now has a total backlog of 155 Airbus A321neos.
Ryanair is the largest European customer for the 737 Max. In December, Ryanair agreed to buy 75 more 737 Max-8 jets. At the time, O’Leary said that the deal would allow the carrier to grow to 200 million customers from 149 million customers per year.
O’Leary said Tuesday that the airline has “more than sufficient order pipeline” for its growth plans over the next five years.
Boeing Dreamliner Delivery Delays
Deliveries of the Boeing 787 Dreamliner may not start until late October due to regulator inspection delays, sources told the Wall Street Journal on Saturday.
A new issue was found in the forward pressure bulkhead at the front of the plane, involving the skin of the aircraft, in July prompting a pause in deliveries that was expected to last just three weeks.
But the Federal Aviation Administration rejected Boeing’s proposal to speed up the approval process through targeted checks on just three aircraft.
Boeing’s manufacturing processes have come under fire since two deadly crashes of its 737 Max jet. Investigations into Boeing’s certification process further exposed a toxic work culture, and warnings from some employees said overworked factory staff were making mistakes.
The bulkhead issue has created a buildup of at least 100 aircraft and the Dow Jones aviation giant expects to deliver less than half of the Dreamliners in its inventory this year. That’s down from an earlier estimate of nearly all its completed planes.
Boeing Stock Falls On 737 Max, Dreamliner Issues
Shares dipped 0.8% to 216.45 in premarket trading on the stock market today. Boeing stock is trading sideways below its 50-day and 200-day lines.
Ryanair’s U.S. listed shares rose 0.8% early to 108.93. Airbus’ U.S. listed shares were unchanged and Delta dipped 0.2%.
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