Airbus shuns lure of Ryanair mega deal

Airbus has spurned Ryanair‘s attempt to lure it into a bidding war with Boeing over a multi-billion dollar order for up to 400 short-haul jets.
The European aircraft manufacturer says it is unwilling to offer the scale of discounts Ryanair is seeking. The low-cost carrier is aiming to take advantage of the weakening commercial aerospace market.It hopes to repeat its tactic in January 2002, near the bottom of the last aviation recession following September 11th and the SARS epidemic, when it ordered 100 aircraft and another 50 options. It was the biggest order Boeing ever received for its 737 jets. In return Ryanair secured one of the largest discounts agreed by the Boeing.
Airbus’s reluctance to enter the bidding for the Ryanair order appears highly unusual given traditionally fierce competition with Boeing. Airbus would risk losing its prized position of world’s biggest commercials aircraft manufacturer over the deal.
In the last downturn easyJet also secured heavy discounts from airbus to switch from an all-Boeing fleet.
Michael Cawley, deputy chief executive and chief operating officer for Ryanair, told the Financial Times that he expected the group to place the order with 18-24 months.
Ryanair is midway through a plan to double its fleet and passenger numbers between 2007 and 2012. Passenger volumes are scheduled to grow from 43m in the year to March 2007 to 87m in the year to March 2012, when Ryanair will have become the biggest short-haul carrier in Europe.
Mr Cawley said that due to the size of the order, Ryanair would be happy to move to a mixed airbus/Boeing fleet. The potential order would spark a fierce bidding war between the two aviation giants, which are facing plummeting orders amid the current downturn.

Michael O’Leary, Ryanair chief executive and key senior colleagues have visited Airbus headquarters in Toulouse, but the European group has told the party that it is not interested at the prices Ryanair is seeking.

John Leahy, Airbus’s chief commercial officer, told the Financial Times: “We are not in discussions with Ryanair about aircraft. That is on the record. We don’t have plans to enter a sales campaign with Ryanair, which would be very expensive and very time consuming.”