A Positive Ryanair Story....You decide...

AlekSmart

No doubt about it,even though Micheal O Leary and Boeing no longer drink in the same Pub,this story and the accompanying vid-clip has so many BIG figures that surely are cause for positive comment ?

http://www.flightglobal.com/articles/2011/02/28/353710/pictures-video-ryanair-takes-delivery-of-300th-737-800.html

After all,those are IRISH tricolours on those 73`s...?

David086

It is really good news, I'd say one day that either Boeing or Michael O'Leary will give in and they'll become ''best pals''. I don't see him in a couple of years when the orders for 737's are finished going to another manufacturer.

lord lucan

David086 wrote: »

It is really good news, I'd say one day that either Boeing or Michael O'Leary will give in and they'll become ''best pals''. I don't see him in a couple of years when the orders for 737's are finished going to another manufacturer.

TBH i don't see FR giving in or being best pals with anyone. It's not how they operate,more like they get what they can but as soon as it doesn't suit them they leg it. I'm not an FR basher btw so i'm not trying to bash FR or anything like that. The post 9/11 deal they got from Boeing was a great bit of business for FR but Boeing felt aggrieved at the apparent gloating from O'Leary in the press about how he'd screwed Boeing. The 738 has been very successful for FR and Boeing but FR will always look for a cheaper and more efficient model in the future when the need arises. The only thing they wouldn't change imo would be fleet standardisation.

Love that pic of all the 738's lined up astern.:)

Steyr

I posted that in the News section but from the Boeing website, amazing shot of them lined up, now thats a place I would love to visit, what a 24/7 Operation!

munchkin_utd

crazy stuff.
Nice find to see the video and all with the lines of Ryanair planes.

according to an article from the time when the order was placed in 2002, they didnt even have 10 million passengers at that stage, and they were operating 44 planes.
http://www.airliners.net/aviation-forums/general_aviation/read.main/716369/
(note, they mentioned from the outset that it was an order very influenced by the very generous terms offered by Boeing)

now its 70million passengers and 254 planes in operation! And a fleet worth 18 Billion Dollars!

In reality its the only proper large scale Irish success story in any business field.
They should definitely get more credit for their success than they do.
How many other home grown Irish companies employ 7500+ employees? (aside from the public service!!)

TheAnswer

My first post on boards, was watching a programme on Beeb2 last night on the changing face of Anglia in the UK, Stanstead was featured with the ubiquitous FR 738 taking off, an article on the Beeb news last week about aviation in general featured a FR 738, I've noticed it on a few other programmes too when an FR 738 landing/taking off is becoming the standard generic shot when an airport or air travel item is being covered. Well done Mick!

STEVE35

Boeing have produced a nice video to celebrate Ryanair's 300th 800

http://www.boeing.com/videos/video.html?fr_story=3ce637ac5af45feca2fb901de09f8c944e2a530b&rf=bm

xflyer

I remember being at Girona Airport once, flew in on Ryanair of course. There was only one airliner there that didn't have a tricolour on it. All Ryanair. You had to feel a certain sense of pride.

Rarely is anything Irish so in your face and successful. Ryanair is the generic airline in Europe right now. Love them or hate them.

basill

It was a remarkable deal at the time but don't expect it to be repeated in the future. Boeing was literally on its knees at the time and it was either do business with MOL or close down production lines.

The long term damage that the deal did to the industry was huge. Many people wrongly think that manufacturers are only in the game of putting widgets together. In fact the big boys not only design and build but are into leasing, spares, training etc etc. Many of the contracts will have sale and leaseback clauses or other price/option triggers based on prevailing market rates. When MOL started acting as a broker selling low time 737's for a profit and less than what Boeing were listing them at it had massive knock on effects within the industry.

Both Boeing and Airbus learnt from that day. Never again will either of them allow themselves to be so overly reliant on one customer. You see it now with the diversification of their customer bases across the world. You also can read numerous statements from Airbus where they say they are more than happy to sell MOL 320's but at a "price".

TheAnswer

basill wrote: »

It was a remarkable deal at the time but don't expect it to be repeated in the future. Boeing was literally on its knees at the time and it was either do business with MOL or close down production lines.

The long term damage that the deal did to the industry was huge. Many people wrongly think that manufacturers are only in the game of putting widgets together. In fact the big boys not only design and build but are into leasing, spares, training etc etc. Many of the contracts will have sale and leaseback clauses or other price/option triggers based on prevailing market rates. When MOL started acting as a broker selling low time 737's for a profit and less than what Boeing were listing them at it had massive knock on effects within the industry.

Both Boeing and Airbus learnt from that day. Never again will either of them allow themselves to be so overly reliant on one customer. You see it now with the diversification of their customer bases across the world. You also can read numerous statements from Airbus where they say they are more than happy to sell MOL 320's but at a "price".

MoL is being cast as some sort of villain here for for nailing Boeing to the wall when he secured that deal after 9/11.
He probably saved Boeing's ass at the time (or certainly helped in a very big way).
If your local sweet shop was selling your favourite bar of chocolate well below its RRP wouldn't you snap up a good few?
I'm not a fan of FR or MoL but he's cast in a very bad light or maybe I'm picking it up wrong?
I'm sure MoL knows he's not likely to secure such a good deal again but he ain't gonna roll over for the manufacturers either!

AlekSmart

basill wrote: »

It was a remarkable deal at the time but don't expect it to be repeated in the future. Boeing was literally on its knees at the time and it was either do business with MOL or close down production lines.

The long term damage that the deal did to the industry was huge. Many people wrongly think that manufacturers are only in the game of putting widgets together. In fact the big boys not only design and build but are into leasing, spares, training etc etc. Many of the contracts will have sale and leaseback clauses or other price/option triggers based on prevailing market rates. When MOL started acting as a broker selling low time 737's for a profit and less than what Boeing were listing them at it had massive knock on effects within the industry.

Both Boeing and Airbus learnt from that day. Never again will either of them allow themselves to be so overly reliant on one customer. You see it now with the diversification of their customer bases across the world. You also can read numerous statements from Airbus where they say they are more than happy to sell MOL 320's but at a "price".

Yes indeed Basil,all well and good but it also brings into stark focus all the good-vibe pahlavah we are asked to accept about the "Customer being King" etc etc...

In the Boeing/Ryanair scenario all Micheal O Leary did was push that nice soft-sounding PR stuff to it`s utter limit.

It`s something he has utilized in the Airlines business model himself to great (and hugely profitable) effect.

Reality,commercial and operational,is what counts not soft-focus PR drivern codswallop about "Serving the Entire Community" or "Patting YOUR Babys head".

Ryanairs load-factors tell the tale and I`d imagine Michael O Leary will only change tack when those stats beging to tell a different story.

I love the story of him being asked the definition of the ideal Ryanair customer......

"Possessing a Credit-Card,a pulse and an ability to comply with the airlines simple requirements"

Thus far,the European customer base appears to have enough of these folks to keep Micheal O Leary in prize bullocks for a few years more !

cson

munchkin_utd wrote: »

crazy stuff.
Nice find to see the video and all with the lines of Ryanair planes.

according to an article from the time when the order was placed in 2002, they didnt even have 10 million passengers at that stage, and they were operating 44 planes.
http://www.airliners.net/aviation-forums/general_aviation/read.main/716369/
(note, they mentioned from the outset that it was an order very influenced by the very generous terms offered by Boeing)

now its 70million passengers and 254 planes in operation! And a fleet worth 18 Billion Dollars!

In reality its the only proper large scale Irish success story in any business field.
They should definitely get more credit for their success than they do.
How many other home grown Irish companies employ 7500+ employees? (aside from the public service!!)

Fyi CRH and Kerry Group are massive too.

Run_to_da_hills

Despite O'Leary getting these planes for a song I'm sure Boeing will screw him on maintenance components for wear and tear on his fleet.

I also heard that Boeing weren't too happy when O'Leary sold off some of his planes for more than he paid for them.

Steyr

Run_to_da_hills wrote: »

Despite O'Leary getting these planes for a song I'm sure Boeing will screw him on maintenance components for wear and tear on his fleet.

I also heard that Boeing weren't too happy when O'Leary sold off some of his planes for more than he paid for them.

Your second sentence is probably the reason he does not pay much in terms of maintenance, he most likely and obviously gets them brand new, uses them for a bit then offs them most likely.

In fact does anyone know how long they keep a 738 for before selling them on?

A320

I'm not sure,definitely gets rid of them before the 12 year check

troposphere

off topic, but how come Bombardier never expanded into the Republic?

Run_to_da_hills

troposphere wrote: »

off topic, but how come Bombardier never expanded into the Republic?

We had already learned that lesson from all the busses that they built in Shannon.

Manic Moran

I do miss that colour scheme. Looked particularly nice on DART.

NTM

doopa

I'm not a massive MoL fan - he is entertaining though... He did well to get the original deal after 9/11, striking at the right time and all. When does that deal come to an end anyway?

But I've always wondered what do France, the UK and Germany reckon to his snubbing of Airbus. If Ryanir ever manage to do the intercontinental flights would there not be pressure placed on Ireland to make him 'choose' airbus?

On topic - yes it is good news.

Run_to_da_hills

doopa wrote: »

I'm not a massive MoL fan - he is entertaining though... He did well to get the original deal after 9/11, striking at the right time and all. When does that deal come to an end anyway?

But I've always wondered what do France, the UK and Germany reckon to his snubbing of Airbus. If Ryanir ever manage to do the intercontinental flights would there not be pressure placed on Ireland to make him 'choose' airbus?

On topic - yes it is good news.

O'Leary won't change that easily, he originally based his company on Southwest airlines which uses just one model / type plane. If he is to change to Airbus he would want to be getting a very attractive deal to make it worth while to change the entire lot.

doopa

Run_to_da_hills wrote: »

O'Leary won't change that easily, he originally based his company on Southwest airlines which uses just one model / type plane. If he is to change to Airbus he would want to be getting a very attractive deal to make it worth while to change the entire lot.

Is that to do with maintenance?

Run_to_da_hills

doopa wrote: »

Is that to do with maintenance?

Maintenance, stock taking of spares, crew and pilot training etc.

Look at the hassle other airlines have each time they introduce another model.

Dacian

I can't see any country pressuring FR into going Airbus. Its a business, they will choose the jet that suits their needs at the most attractive price.
FR had in fact looked at the A320 in the 1990's. I saw a pic once of one in Airbus livery but FR titles in DUB once. (This was in the pre-LCC days)

Run_to_da_hills wrote: »

O'Leary won't change that easily, he originally based his company on Southwest airlines which uses just one model / type plane. If he is to change to Airbus he would want to be getting a very attractive deal to make it worth while to change the entire lot.

The single type model is based on quantity linked savings on crew training, cabin fittings, operational changes and maintainance. But once you get to a certain fleet size you still make those savings with 2 types. Look at the EZ gradual switch from B737 to A319/A320, Jetblue having A320/E190 in their fleet, Southwest themselves have taken on the B717 with their takeover of AirTran.

Steyr wrote: »

In fact does anyone know how long they keep a 738 for before selling them on?

I'm not sure but it is a lot lower than 12 years. Look how quickly the fleet became all winglets (B73H) the early B738 with no winglets are long gone. I would be inclined to think it is less than 7-8 years. Quick turnaround of aircraft bought at a knockdown price but able to be sold on the very sought after 2nd hand market is a essential part of the FR fleet mgmt strategy.

So if FR get a good enough deal from Airbus, Sukhoi, COMAC they could make a big 10 year order. With their far flung base structure they could slowly convert various small bases (2-5 aircraft) to the new type and consolidate the B737 at larger bases to keep the interoperability clustered.

I would be inclined to think that the end of the famous huge order for B737-800s could very well coincide with a change in the overall FR business model. MoL himself has hinted that after he leaves it may well become a different airline.



To go back to the OP, the FR/Boeing tale is definitely a positive one. I had a mate in college in Seattle when they order was made. She was shocked at how the massive order was received in the city and how it stopped the looming spectre of a plant closure/line suspension.

Run_to_da_hills

The only reason I could see FR changing aircraft would be if he considered switching his business model to include longer haul flights with the option of the A350 / Or B787. I wouldn't say O;Leary would be loyal to any manufacturer.

writhen

cson wrote: »

Fyi CRH and Kerry Group are massive too.

+1
CRH turnover 17 billlion, employ 80,000 people and are truly global.

mickdw

Someone above said that ryanair are now operation 254 planes coming from 44 approx in 2002. If they have had 300 new ones delivered, we can assume that he has sold off the 44 that he had in 2002 and 46 or so of the 737 800s delivered since then. Those figures would suggest that they keep the aircraft about 7 years.

Lapin

doopa wrote: »

But I've always wondered what do France, the UK and Germany reckon to his snubbing of Airbus. If Ryanir ever manage to do the intercontinental flights would there not be pressure placed on Ireland to make him 'choose' airbus?

I doubt it. Such political interference (however well intentioned) would be exposed as corrupt.

And anyway, while the French, UK & German governments are squabbling behind the scenes over how to bribe the Irish government into putting such pressure on Michael O'Leary, he will be over in Seattle making Boeing an offer they can't refuse.

TheAnswer

Lapin wrote: »

I doubt it. Such political interference (however well intentioned) would be exposed as corrupt.

And anyway, while the French, UK & German governments are squabbling behind the scenes over how to bribe the Irish government into putting such pressure on Michael O'Leary, he will be over in Seattle making Boeing an offer they can't refuse.

We could tell the IMF to dump the debt if FR went Airbus:D

doopa

Lapin wrote: »

I doubt it. Such political interference (however well intentioned) would be exposed as corrupt.

And anyway, while the French, UK & German governments are squabbling behind the scenes over how to bribe the Irish government into putting such pressure on Michael O'Leary, he will be over in Seattle making Boeing an offer they can't refuse.

I don't reckon the French are particularly well intentioned. I think they would be quite up for it on the grounds of self-interest. They do it already for their so-called National Champions in the oil, defense, finance, software and other sectors. It would be more an extension of this. The French aren't above corruption, but then neither are boeing.

But yeah - I agree MoL would probably be above this level of squabbling. Interesting - Ryanair CEO - more morals than our governments. I suppose I'm just suggesting that I'm surprised this kind of thing hasn't come out in the press.

What happens when/if Ryanair take over Aer Lingus. Do they not have a large Airbus fleet? Which leads me to - what's the hold up with Ryanair intercontinental flights?

996tt

munchkin_utd wrote: »

crazy stuff.
Nice find to see the video and all with the lines of Ryanair planes.

according to an article from the time when the order was placed in 2002, they didnt even have 10 million passengers at that stage, and they were operating 44 planes.
http://www.airliners.net/aviation-forums/general_aviation/read.main/716369/
(note, they mentioned from the outset that it was an order very influenced by the very generous terms offered by Boeing)

now its 70million passengers and 254 planes in operation! And a fleet worth 18 Billion Dollars!

In reality its the only proper large scale Irish success story in any business field.
They should definitely get more credit for their success than they do.
How many other home grown Irish companies employ 7500+ employees? (aside from the public service!!)

Its interesting to read peoples reaction to the order back in 2002, plenty of people predicting that they wouldnt be able to handle the order and would go bust within a few years

996tt

A320 wrote: »

I'm not sure,definitely gets rid of them before the 12 year check

And thats Ryanairs problem going forward, up to this point they have avoided the heavy maintenance costs on their planes as they sell them before they need any, the steady flow of new planes replacing the plans that require maintenance is going to dry up eventually.

Combine that with the fact that Ryanair will soon no longer make profits on disposal of aircraft has to mean less profits

cson

996tt wrote: »

And thats Ryanairs problem going forward, up to this point they have avoided the heavy maintenance costs on their planes as they sell them before they need any, the steady flow of new planes replacing the plans that require maintenance is going to dry up eventually.

Combine that with the fact that Ryanair will soon no longer make profits on disposal of aircraft has to mean less profits

They're in or around being the most profitable airline in the world. I don't think it'll unduly worry them having to spend on overhauls or maintenance.

Tenger

cson wrote: »

They're in or around being the most profitable airline in the world. I don't think it'll unduly worry them having to spend on overhauls or maintenance.

I think they are the 2nd after SouthWest.......however to date the FR strategy has relied on massive expansion year on year throughout Europe (10% per year) This was greatly facilitated by the massive 300 plane order in 2002. Many airlines are actually restricted by delays in delivery of new aircraft. With production lines so full airlines may have to order 3-4 years before they actually get the physical aircraft.

It remains to be seen how they will adapt over the next 2-4 years. Do they A)get a new large order with A or B (or elsewhere) to continue this growth, or
start to curb the growth and alter their current ULCC business model to something along the lines of JetBlue, SouthWest, VirginBlue etc?

[As a comparison to those who say FR copied SouthWest. I would say they copied part of the SouthWest business model.
Southwest are the largest operator of the B737 in the world, over 500 units of the aircraft family. They offer complimentary beverages on their low fares flights. Southwest have historically had YoY growth of less than 5%. They have unionised workers. They profit share with their employees which offers incentives. The directly discuss changes to strategy with their employees. They respect their customers as an asset to be retained. They offer a simple Point to Point service, but increasingly have developed quasi-hubs which allow pax to 'connect' to another SouthWest flight.]

christy c

As far as I know Ryanair sold planes for more than their book value i.e. Cost minus depreciation. People seem to suggest that they sold them for more than their cost, which I understand is a myth. Correct me if I'm wrong but I think that's the case.

Run_to_da_hills

christy c wrote: »

As far as I know Ryanair sold planes for more than their book value i.e. Cost minus depreciation. People seem to suggest that they sold them for more than their cost, which I understand is a myth. Correct me if I'm wrong but I think that's the case.

O'Leary could name his price when flogging fresh aircraft as there would be little or no waiting period involved.

An order from Boeing could take up to several years if there was a list of orders ahead of them, this alone is worth something.