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Tuesday, March 17, 2015

Ryan Air Ponders The Pond (Motley Fool Update)

Atlantic travel is a becoming idea for Ryanair. Transatlantic voyages are just a beck and call away from passengers if using Ryanair new equipment. Boeing has already built half its 787-8 backlog. Jet Star and Norwegian have shown how to place 331 and 291 seats in a 787-8 respectively. O'Leary knows what the second half of Boeing's 787-8 backlog will look like at the end of  his own five year plan. If Boeing builds just 50 787-8's a year, Ryanair could be at the head of the 787-8 line in 2019 if it orders this year.

If they wait another year before ordering 787-8's, they may get jumped by others adding to the 2019 backlog scramble. The 787-9 is a big seller and will gain orders each year keeping its pacing with a larger backlog than the 787-8. The 787-10 will come on in Charleston in 2020. Boeing needs more 787-8 orders for the year 2020 booked, sooner rather than later. Ryanair knows this and will be looking for a special incentive deals from Boeing for some 787-8's for that time slot. The question is always how many do you want from Boeing? The reply is always what kind of of a deal can you put together if we order 20,40 or 50 787-8's.

The problem for O'Leary is knowing that waiting too long may increase a new Boeing 787-8 backlog before he can pull the order trigger. Hurrying up may cause him to lose out on a pricing deal. The answer is found when other airlines make market orders. If someone places a 787-8 in a large number, during 2015, Ryanair will jump-in with its order soon after another first big order announcement. I will now guess O'Leary will buy 25 787-8's to start with and then option for 25 later on before the market fills Boeing's backlog. It will make sense for its European network and North America connections when crossing the Atlantic pond.

Five Days After Winging It Blog Comes this from Motley Fool

Look Out American Airlines, Ryanair is Entering Your Airspace!


"For the business case to make sense, Ryanair must buy planes that are fuel-efficient but also reasonably priced. Ryanair operates an all-Boeing fleet today, and CEO Michael O'Leary has expressed interest in Boeing's Dreamliner for long-haul operations -- just not at the going price!"

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