One of Boeing's biggest customers says it's halting talks about a potential $10 billion order of 737 Max 10 jets over a price dispute
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- Ryanair, one of Boeing's biggest customers, says it's stopping talks about ordering 737 Max 10 jets.
- Ryanair CEO Michael O'Leary said the companies couldn't come to an agreement on price.
- Boeing is trying to rebuild confidence in the Max, which had been grounded for 20 months.
- See more stories on Insider's business page.
Boeing faces a standoff with one of its biggest customers after Ireland's Ryanair said it had ended talks over a purchase of 737 Max 10 jets worth tens of billions of dollars due to differences over price.
The rare decision to go public over big-ticket airplane negotiations comes after months of wrangling that had already delayed a deal for the largest version of the 737 Max when Ryanair re-ordered a smaller model in December.
A large new Ryanair order would provide a boost to the US planemaker as it rebuilds confidence in the Max, grounded for 20 months until November after two fatal crashes. It would also speed a tentative industry recovery from the COVID-19 pandemic.
Europe's largest budget carrier is already the region's largest Max customer, with 210 of the 197-seat Max 8-200 on order. It has dangled a fresh order potentially worth $33 billion at list prices for up to 250 of the 230-seat Max 10.
Even after steep industry-wide discounts, such a deal would still be worth well over $10 billion, analysts estimate.
But last week, Ryanair Group CEO Michael O'Leary poured cold water on chances of a quick deal, saying he would be surprised if agreement was reached this year.
On Monday, he said talks had collapsed.
"We are disappointed we couldn't reach agreement," 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."
The company added that "it became clear that the pricing gap between the partners could not be closed and accordingly, both sides have agreed to waste no more time on these negotiations."
A Boeing spokesperson said that Ryanair was a long-standing partner.
"We value their business and are committed to supporting them," the spokesperson said. "At the same time, we continue to be disciplined and make decisions that make sense for our customers and our company."
O'Leary has played down the prospect of defecting to Airbus
While Ryanair has nominally ended talks, analysts said it was gambling that public pressure will lure Boeing to the table with an improved offer as the planemaker juggles the fallout from the Max crisis, uncertainty over COVID-19, and industrial woes.
Boeing, however, appears to believe the market is finally moving in its direction after winning a series of orders including 150 Max 10 from United Airlines.
Industry experts say Ryanair is one of two budget kingpins alongside Southwest that can insist on best prices from Boeing.
The spread of COVID-19 variants and public acceptance of the Max will help determine whether prices have further room to fall or whether Ryanair, one the industry's toughest negotiators, has missed the bottom of the market for the largest Max model.
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