Airline holding company IAG “definitely” will turn its Letter of Intent to take 200 Boeing 737 MAXs, signed recently to great fanfare at the Paris Air Show, into firm orders.
That’s what IAG CEO Willie Walsh confirmed to AirlineRatings this week in Brussels.
“I have never held back that we are dissatisfied with Airbus, as deliveries of A320neos to Vueling were on average 70 days late”, said Walsh on the sidelines of an event by European airline lobby A4E.
“I know what I am doing as a former 737 pilot myself, and this order is not due to alleged rock bottom prices from Boeing, but the fact that we need at least a healthy duopoly of manufacturers.”
He was supported in his views by Ryanair chief executive Michael O’Leary.
O’Leary’s airline holds unfulfilled orders for 135 737 MAXs in the special MAX 200 version with 197 seats, plus holding 75 options.
“Currently we only have placed orders for up until 2024, so we are looking for more,” O’Leary told journalists.
“My fleet is 450 aircraft this summer and I have 55 aircraft on order for next summer.”
He ruled out any suggestion Boeing should go back to producing 737NGs, making the MAX Ryanair’s only option.
READ: Boeing appoints company veteran to head 737 program.
Neither O’Leary nor Walsh committed themselves to keep the brand name “MAX” in the future after it was tarnished in two crashes and the current global grounding.
Walsh insisted he would buy aircraft based on Boeing’s reputation, which doesn’t necessarily need to be connected with the name MAX.
According to industry sources, Ryanair has been given contractual guarantees by Boeing ensuring the low-cost airline will always get better prices for MAXs than the competition.
“Getting a lower price is certainly part of the discussion with Boeing”, said O’Leary, who will be negotiating with Boeing in Seattle in two weeks time.
He stressed it was a priority now to get a dependable timeline from Boeing of when the MAX could fly again.
”We don’t have that much faith in the dates given by Boeing,” he said. “At the moment they say it’s the end of September.”
However, Ryanair would need two extra months after that to get its special version MAX 200 certified.
“So that would be November for us and certainly be enough time to get 45 to 50 aircraft by June 2020”, he added.
“But if the MAX return moves back to later months, we might only be able to get 30 aircraft or so.”
Also, Ryanair’s maximum intake of new aircraft is limited.
“We can only take aircraft safely at a rate of six or eight a month, so a further delay may even slow down our growth in 2021”, warned the Ryanair CEO.
More acute, of course, is the threat of fleet problems for the next Northern summer.
“I don’t want to close bases or cut aircraft at certain bases because I don’t have enough aircraft for summer 2020”, O’Leary stressed.
At the same time, he emphasized the need for healthy competition between aircraft manufacturers, as did Willie Walsh.
“It’s critical that Airbus has a strong and robust competitor, otherwise the cost of aircraft will just explode”, he warned.
He also criticized Boeing’s communication performance during the MAX issues.
“I think Boeing handles this the best they can,” he noted. “It’s a crisis for Boeing, but we would liked to have seen them act much more urgently on it.”
O’Leary denied any plans to split Ryanair’s business into even more different brands.
“We are very happy to have Ryanair, Buzz in Poland, Malta Air and Laudamotion in Austria as subsidiaries,” he said. “(We) don’t see any need to add more AOCs than the four we have – with a possible fifth one being Ryanair UK.”
In typical brash O’Leary manner, the Ryanair CEO also flatly rejected the possibility that people might fly less in the future, even if the young generation of students currently embraces the “Fridays for Future” movement, demanding action on climate change and blaming flying as one of its main causes.
He also dismisses campaigns such as “FlyResponsibly” by KLM asking the public to fly less.
“That’s nonsense, people of 15 years all want cheap flights to Ibiza, Santorini or Thessaloniki,” the father of four said
“The last thing 15- or 18-year olds want is to act responsibly. Smoking is not responsible.
“Flying within Europe on low fares is one of the more responsible things they do do.”
