Ryanair chief threatens to pull plug on deal to buy Boeing planes

Published on Thursday 19 November 2009 21:18

RYANAIR will wait until the end of the month or very early in December to reach a deal with Boeing on a fresh batch of aircraft orders, Ryanair chief executive Michael O'Leary said yesterday.

If no preliminary agreement is reached around the end of the month, allowing time to sign a formal deal by the end of the year, then the low-cost carrier will end its long-running relationship with the aircraft maker, O'Leary said, in the latest of his threats as part of the bargaining process with Boeing.

O'Leary, renowned in the industry for driving hard bargains, had already warned this month that talks on ordering 200 aircraft for 2013-16 delivery had not progressed much and, hence, that might slow down Ryanair's rapid growth from 2013.

"I am not wasting another Christmas holiday trying to talk to guys in Seattle," O'Leary said, referring to Boeing's home base, adding he thought it highly unlikely that a deal would be reached.

O'Leary also reiterated he might break with his policy of not paying dividends, adding that mid- to late-2011 might be the time to start returning cash to shareholders as Ryanair's current capital investment programme would be tailing off by then.

"Around mid- to end-2011 we'll be looking at very substantial senior management bonuses and distributions to shareholders, in that order," O'Leary said. "I think I'm worth it."

News of O'Leary's threats against Boeing came as Air Berlin, Germany's second-biggest airline, unveiled plans to expand capacity by 3-4 per cent next year, despite the global economic downturn.

The rival to Lufthansa said the growth will be on top of flights added as part of the recent takeover of TUIfly's city routes.