Ryanair CEO Michael O’Leary has always been keen to renew the fleet of group subsidiary Lauda. At one point, it seemed he would stick with Airbus for the airline, and was in discussions with the European manufacturer for a large order of their latest generation narrowbody. But with little wiggle room on price, it seems Airbus is losing the battle. O’Leary believes it’s inevitable that Lauda will eventually become an all-Boeing operator.
Ryanair wants to replace Lauda’s Airbuses
When Ryanair acquired Lauda, it acquired a new plane type too. For an airline that, historically, had operated only Boeing 737s, having a bunch of Airbus aircraft thrown into the mix really stirred things up. Suddenly, the group needed pilots with different qualifications, it had different requirements for maintenance, and it had a new manufacturer to talk to.
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Over the course of the two years since Ryanair took majority control of the airline, its love-hate relationship with the Airbus fleet has swung from one extreme to the other. Mooted to be negotiating a major order with Airbus for the A321 18 months ago, much water has gone under the bridge since then.
As the COVID pandemic began to bite and labor disputes in Vienna made management tricky, Ryanair took the step to cancel all future A320 deliveries that had been agreed for Lauda. For the existing fleet, retirements have taken place and leases negotiated. While Ryanair has stopped short of closing down Lauda, it is now little more than a wet lease airline for the main Ryanair brand, with only seven A320 registered as its own.
Speaking at a World Travel Market interview this week, CEO of Ryanair Michael O’Leary said that, in the long run, Lauda was likely to become a Boeing-only airline. He said,
“Lauda has a fleet of secondhand, leased A320s. We would very much like to replace that with a fleet of A320 or A321 neos, but only if the pricing can match what we have on Boeing. And if it doesn’t match what we have on Boeing, then you know, regrettably, I think we’ll finish up getting rid of the Airbuses out of Lauda altogether. Ultimately, it will become a Boeing operator.”
Lauda’s fleet has an average age of almost 14 years, which isn’t old by most standards. However, in comparison to Ryanair’s own fleet, which averages just 8.8, these aircraft are old and are dragging down the group’s ambition to be the greenest airline in Europe.
Still a ray of hope for Airbus?
While O’Leary is clear that he wants to replace Lauda’s aging A320s, he hasn’t entirely ruled out Airbus. He said,
“I am still hopeful and still optimistic that we can reach a deal with Airbus on price. The challenge though, is and this is one for Airbus, is they’ve got to be able to match Boeing’s pricing … We’re a one trick pony, we go with whatever aircraft offers us the lowest per seat cost.”
It would make sense for Airbus to offer Ryanair a really good deal on its aircraft. After all, this is not a small airline group that it’s dealing with. It’s Europe’s biggest by fleet size, and doesn’t place orders for tens of aircraft – it places orders for hundreds.
However, O’Leary thinks Airbus will struggle to get close to Boeing on price. He said,
“The challenge for Airbus in doing a deal with us is twofold. One, the neo, before COVID, was a very successful programme anyway, so they have a much longer tail of back orders at higher prices than Boeing has.
“In many respects, we are we are we’re a victim of the success of our partnership with Boeing. We, frankly, have lower prices on Boeing than Airbus can offer on the Airbus aircraft, for understandable reasons.”
While it seems Ryanair is not averse to working with Airbus, the higher price of the neos means, in time, Lauda will almost certainly begin flying the 737 exclusively.