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AIRLINE CHIEF RAPS BOEING

ABOVE: The plane row has angered O'Leary

3rd November 2009

By Bill Martin

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BUDGET airline Ryanair yesterday threatened to scrap plans for rapid growth if it cannot agree a deal with Boeing for 200 aircraft by Christmas.

Chief executive Michael O’Leary said he would return the money saved to shareholders unless the airline manufacturer moved closer to Ryanair’s ideas on price.

O’Leary said Boeing should pass on some of the savings it had achieved from suppliers and by becoming more efficient to its customers at a time when they are cutting fares.

“We would prefer to grow, but if Boeing doesn’t share our vision, then I believe Ryanair should change course before the end of this fiscal year.

“If we cannot invest our surplus cash efficiently in new aircraft, then we should give it to our shareholders.”

Ryanair has a £2.25billion cash pile. It said it still saw “massive expansion opportunities”, but the shares fell after it failed to meet hopes it would raise full-year profit expectations.

Underlying profit rose 80%, but this was largely on the back of falling fuel costs.

Fares and revenues fell, and the airline is expected to make a second-half loss.

Fares fell 17% in the first half, and decline is expected to accelerate.

Analysts said O’Leary’s comments on Boeing were a negotiating ploy. They also said Ryanair would struggle to maintain passenger traffic growth of 15% a year without cutting fares too low to make money.

To save costs, the airline has frozen the pay of its 7,000 employees.

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