Ryanair Threatens to End Relationship with Boeing Over Prices

Ireland’s main budget airline, Ryanair, announced today a price dispute with Boeing in a very public warning to the large, international aircraft manufacturer. The low-cost air travel provider told Boeing that its constant growth could halt as airlines rapidly try to curb climbing ticket prices.

Ryanair is becoming one of Europe’s most popular airlines, and they announced on Monday that they had massive expansion opportunities but that their expert analysts had warned that sustaining a 15 per cent annual growth rate would result in fares too low to be profitable.

Gert Zonneveld, an analyst at Panmure Gordon, said that he did not see the airline being able to cut costs much further, stating that despite it’s minimal services in order to operate an airline, two pilots, crew, and aircraft are still needed and must be maintained.

Ryanair has announced that current talks with Boeing regarding a placement order for 200 new aircraft which would be completed and delivered between 2013 and 2016 were stalling over price negotiations. The budget, Irish airline went so far as to threaten to break off the relationship with Boeing, the largest US aircraft manufacturer.

Ryanair is still aggressively trying to expand in Europe, the company recently bid twice unsuccessfully on a hostile takeover of Aer Lingus. The company has said they will not attempt a third bid as the Irish government is expected to bail the company out.