Not really. For a lengthy period of time time, Boeing were not willing to agree a follow-up B738 order with Ryanair on terms which made financial sense to management at the company. Under these circumstances, can it be classed as a 'pretty expensive cock-up' to walk away from the negotiating table? We cannot make a specific judgment from afar as we were not party to the figures discussed. However, as a general principle of management, overpaying your suppliers is not a good long-term strategy, especially for products with a very high unit cost. There is always a price above which it is better to walk away.
Ryanair will have carefully assessed the opportunity cost of delaying a follow-up order versus the potential profit to be derived from expedited fleet expansion. All the numbers will have been crunched, including those relating to fleet disposals. 'Growing like gangbusters' (to borrow a favourite MOL phrase) is not the only game in town. Waiting for the price to come to you can make alot of sense too. Keeping a leash on costs is just as important as growing the business. It is all about the bottom line in the end.
On the issue of short-term summer leases, Ryanair is not the first company to acknowledge the value of boosting peak period seat inventory which can be sold at a premium. When the leased units return to their parent company, Ryanair has no ongoing liability to manage this additional capacity on a permanent basis (through the low season). The strategy makes sense.
Last edited by Shed-on-a-Pole; 3rd May 2014 at 01:37.