Irish budget airline, Ryanair, has threatened to put a halt to its rapid expansion plans after discussions with aircraft manufacturer Boeing. Negotiations with the manufacturer took a turn for the worse while a deal for 200 aircraft stalled due to financial issues. The new aircraft were originally planned to be incorporated into the fleet in 2013 to 2016, but the airline has stated that unless they get a better deal than is currently on the table, they will pull out of negotiations and return the money to its shareholders instead.
Michael O’Leary, Ryanair’s controversial CEO, stated “We won’t continue these discussions indefinitely and have signalled to Boeing that if they are not completed before the year end, then Ryanair will end its relationship with Boeing and confirm a series of order deferrals and cancellations. We see no point in continuing to grow rapidly in a declining yield environment, where our main aircraft partner is unwilling to play its part in our cost reduction programme.”
Carrying on with the cost-reduction theme, he then went on to be highly critical of the whole airline industry, branding tourist taxes “stupid” and stating that he has plans to move the majority of his winter flights to lower cost countries such as Italy, Spain, Belgium and the Netherlands.
The airline also plans to slash the average fare for a passenger by around 20% over the next six months, which although it means making a loss in the short term, the number of passengers who use the airline for short-haul flights will grow.