Ryanair cancels planes and reins in growth

Ryanair cancels planes and reins in growth

A war of words has broken out between Ryanair and Boeing after talks broke down over a potential order of up to 200 planes.

The budget airline’s chief executive Michael O’ Leary has accused the aircraft manufacturer of “moving the goalposts” during the negotiations.

Ryanair said it would now rein in its growth and expenditure and return the money saved to shareholders.

Chief executive, Michael O’Leary, said: “We regret that our prolonged negotiations with Boeing have failed to reach a mutually acceptable conclusion.

“While we reached agreement with Boeing on pricing for 200 aircraft deliveries during the 2013-16 period, Boeing were unwilling to incorporate some other terms and conditions from our existing agreement into this new aircraft order.

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“Ryanair has made clear to Boeing that we will not order aircraft if we believe that either the pricing or the other contractual terms and conditions will be inferior to those which we currently enjoy, as this would not be a wise or sensible use of shareholders funds.”

O’ Leary ruled out reopening any further discussions with Boeing.

The airline has been negotiating for some time to buy the B737-800 aircraft for delivery between 2013-2016.

The 200 planes have a list price of $15bn, but Ryanair has been negotiating to secure a hefty discount.

Ryanair said the breakdown of negotiations would not affect the delivery of 112 B737-800s over the next three years.

O’ Leary added:

“Instead we will focus our efforts on maintaining Ryanair’s strong traffic and new route growth into 2010 and we look forward to briefing shareholders in the first quarter of the new year with a revised srategy which will comprise much reduced capital expenditure through 2011 and 2012.”