Tension between Boeing and Ryanair over aircraft prices 1:03
New York (WABNEWS Business) — Ryanair’s CEO launched a scathing, obscenity-laden attack on Boeing’s management on Monday, saying the company’s executives need an “immediate reset or a kick in the ass.”
“Right now we think Boeing management is running around like headless chickens, not being able to sell planes, and even the planes they deliver, they’re not able to deliver on time,” said Michael O’Leary, CEO of Ryanair, the largest Europe’s discount airline, which has ordered nearly 400 planes from Boeing since 2010.RELATED
O’Leary and Boeing had a unusual public dispute last fall over negotiations on a possible next-generation 737 Max order, and Ireland-based Ryanair broke off talks over a price disagreement.
The CEO’s unusual comments on Monday focused on Boeing’s delay in aircraft deliveries.
O’Leary said Ryanair has had to cut its spring and summer schedules because planes expected to be delivered by the manufacturer at the end of April probably won’t arrive until the end of June.
O’Leary was furious about the delays, especially as Ryanair is buying planes known as “white tails”that Boeing had built for other airlines. The original buyer of those planes canceled the order during a 20-month-long shutdown of the 737 Max after two deadly crashes.
“I can understand that there are various challenges in manufacturing new planes, but planes that were built and manufactured two years ago and all you had to do was put gas in them and take them to Dublin, I really don’t understand why they are being delayed two or three months,” he said on a conference call with investors about the airline’s financial results. “It’s a sign of very poor management in Seattle.”
Boeing declined to comment on O’Leary’s remarks.
O’Leary said Boeing makes great planes, but it might be time for a management change.
“Either the current management has to put in more effort, or they have to change the current direction, that’s how we see it,” he said. “We’re very happy to be working with the current management, but they need to fucking improve what they’ve been delivering to us over the last 12 months. … We’re a willing customer, but we’re fighting slow of deliveries and the inability to come to an agreement on new planes despite the number of white tails they have on f**king Seattle soil.”
Boeing has faced numerous problems in recent years, including the 737 Max crisis that cost it more than $20 billion. The company was also affected by an order from the FAA (Federal Aviation Administration) to suspend deliveries of its 787 Dreamliner last June due to quality control problems. And it faced approval delays for its next-generation widebody, the 777X, forcing Boeing to delay first deliveries of the plane by two years, until at least 2025.
Boeing has also suffered substantial losses in its military and space businesses, including a recent $660 million charge for the two planes it is finishing to be used as new Air Force Ones. He is also battling delays in building a spacecraft to carry American astronauts to the International Space Station.
“If they can get their sh*t together, we’d be willing to take more planes for the summer of the 23rd and the summer of the 24th,” O’Leary said. “There is growth to be gained there.”
He also said the airline is willing to resume negotiations on an order for the next-generation 737 Max, though he noted it still has to get FAA approval, making it risky to rely on. For this reason, Ryanair is also studying the possibility of acquiring 50 aircraft on the second-hand market. And he had some very harsh words for the Boeing sales people.
“You wonder what the hell your sales team has done in the last two years,” O’Leary said. “Frankly, most of them seem to be sitting at home in their pajamas working from home rather than out there selling planes to customers.”
O’Leary also criticized Boeing’s recently announced plan to move its corporate headquarters from Chicago to Arlington, Virginia, a Washington suburb.
“Moving the headquarters from Chicago to Virginia, while it may be good for the defense side of the business, doesn’t solve the underlying fundamental problems on the civil aircraft side of Seattle,” he said.
Reviews from other customers
In addition to O’Leary, several other airlines have complained on recent conference calls, albeit in much less colorful language, about the problems they face from 787 or 777X delays.
Domhnal Slattery, CEO of Avolon, one of the world’s leading aircraft leasing companies, suggested earlier this month that Boeing needs a change in culture, and perhaps leadership.
“I think it’s fair to say that Boeing has lost its way,” Slattery told the Airfinance Journal conference, in comments first reported by Reuters and confirmed by Avolon. “Boeing has a very long history… They build great planes. But it’s said that a company’s culture outweighs its strategy, and that’s what happened with Boeing.”