Easy going Boeing
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easyJet was said to have extended RFPs to both Airbus for the A320neo and Boeing for the 737MAX, but he didn't seem to be happy with either OEM's offers and threatened to push the replacement back to 2018.
Unlike Ryanair, EZY are masters at negotiation and will keep the choice open until the very end.
Unlike Ryanair, EZY are masters at negotiation and will keep the choice open until the very end.
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There may be more reasons to the extension of the RFP's. More a case of missing the boat to Ryanair than 'masters of negotiation' from the air n there blog :-
That would make sense with rumours of pushing the replacements back to 2018.
Michael O'Leary was on good form recently when announcing his airline's order for 175 new Boeing 737-800s, of which 75 are likely to be for fleet replacement and 100 for further expansion. This comes at a time when Easyjet is yet to find the right price in talks with Boeing and Airbus and as O'Leary puts it "Europe's flag carriers are getting significantly smaller".
Both things are significant.
Firstly, with Ryanair having taken up most of the slack on the existing 737 production line pending the time in 2017 when the enhanced MAX versions replace it, Boeing is no longer under such intense pressure to do a deal simply to keep deliveries moving and the plants and people occupied. As on cruise lines and many other businesses, few customers, if any, pay the actual list prices . In this instance it will have been worth Boeing's while to have offered Ryanair a very good deal to keep the lines flowing smoothly. The costs and organisational difficulties of substantially slowing them down and then ramping them up again are enormous. Now they don't need to offer anyone else a similar one , unless the prospect of recapturing Easyjet from Airbus makes it strategically worthwhile in the long term . In all such things , one more order for you means one less for the competition so there is always a double whammy in prospect.
Pricewise this could all leave Easyjet in a difficult and exposed position. Airbus will also know that they probably don't now have to cut a deal with them to the bone. As result neither manufacturer is likely to offer the orange people as good a deal as Ryanair obtained. That means that Easyjet's cost of ownership of its next batch of aircraft would be higher than Ryan's for each of the ten plus years that they are likely to remain in the fleet . Reaction in Easyjet's boardroom at being beaten to the draw may well be "Ouch".
Both things are significant.
Firstly, with Ryanair having taken up most of the slack on the existing 737 production line pending the time in 2017 when the enhanced MAX versions replace it, Boeing is no longer under such intense pressure to do a deal simply to keep deliveries moving and the plants and people occupied. As on cruise lines and many other businesses, few customers, if any, pay the actual list prices . In this instance it will have been worth Boeing's while to have offered Ryanair a very good deal to keep the lines flowing smoothly. The costs and organisational difficulties of substantially slowing them down and then ramping them up again are enormous. Now they don't need to offer anyone else a similar one , unless the prospect of recapturing Easyjet from Airbus makes it strategically worthwhile in the long term . In all such things , one more order for you means one less for the competition so there is always a double whammy in prospect.
Pricewise this could all leave Easyjet in a difficult and exposed position. Airbus will also know that they probably don't now have to cut a deal with them to the bone. As result neither manufacturer is likely to offer the orange people as good a deal as Ryanair obtained. That means that Easyjet's cost of ownership of its next batch of aircraft would be higher than Ryan's for each of the ten plus years that they are likely to remain in the fleet . Reaction in Easyjet's boardroom at being beaten to the draw may well be "Ouch".
Last edited by Stall Inducer; 16th Apr 2013 at 08:44.
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It think Airbus took some Boeing 737NG customers lately. Pegasus, Norwegian, AA, Turkish and QF from the back of my head. So Boeing taking back some might be strategic. Upcoming NB orders might come from BA, AF/KL, UA, DL, the Chinese next to Easyjet.
2018? Mmmm.
787 may be ready by then.
787 may be ready by then.
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kessje
Qantas remains all-Boeing for their narrowbodies (JetStar are Airbus).
Turkish currently flies both the 737NG and A320 and ordered both the A320neo and the 737 MAX.
Lion Air, Norwegian and American did add Airbus, but they also placed large 737 orders, as well, so they're not swapping OEMs.
Silkair has decided to switch from Airbus to Boeing, so that's one "win" for Boeing I guess. *shrug*
It think Airbus took some Boeing 737NG customers lately. Pegasus, Norwegian, AA, Turkish and QF from the back of my head. So Boeing taking back some might be strategic.
Turkish currently flies both the 737NG and A320 and ordered both the A320neo and the 737 MAX.
Lion Air, Norwegian and American did add Airbus, but they also placed large 737 orders, as well, so they're not swapping OEMs.
Silkair has decided to switch from Airbus to Boeing, so that's one "win" for Boeing I guess. *shrug*
Last edited by Kiskaloo; 16th Apr 2013 at 20:59.
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Airbus have only approx 100 A320ceos left to sell and neo production is sold out to 2019 so this could explain rumours of Boeing stop-gaps. On the other hand, if easy really were looking to place a large neo order I guess Airbus would wrest slots from lessors if necessary but they certainly won't feel the need to deep discount.
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So logically the next deal will be done at a better than average discount.
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What about the 160-seat C-Series (CS300)? Similar capacity to A319 with
great performance. Bet Easy could get a great volume deal with
Bombardier...
Given the smaller size of the C Series compared to 737 or 320 family, it could be a good fit for easyJet, yes it is not the text book approach for typical low cost airline, i.e. one type, but easyJet are not the text book case, e.g. strategy of using primary airports ('convenient airports) as opposed to flying to remote or secondary airports.
The C series could open up a whole range of routes to easyJet that currently are not feasible at frequency with airbus size aircraft. This could be yet another dimension to the easyJet model.
EI-BUD