Airbus Faces Uncertain Future in Massive Aircraft Orders

Strategic Insights -

Airbus is once again in the running for two massive aircraft orders, but the outcome is far from certain. Irish low-cost carrier Ryanair is in talks with both Airbus and Boeing for an order of 200 planes, while the US Air Force is considering splitting a gigantic contract for airborne refuelling tankers between the two manufacturers. The stakes are high, with Ryanair's chief executive Michael O'Leary seeking at least a 50% discount on the 200 planes, while the Pentagon's decision on the tanker contract could have far-reaching implications for the aerospace industry.

Key Takeaways:

  • Ryanair is in talks with both Airbus and Boeing for an order of 200 planes, with the airline seeking at least a 50% discount.
  • The US Air Force is considering splitting a £27bn contract for airborne refuelling tankers between Airbus and Boeing.
  • Airbus has already snubbed Ryanair's attempts to draw it into a bidding contest against Boeing.
  • The chairman of the US House of Representatives' appropriations subcommittee on defence, John Murtha, is calling on the Pentagon to consider splitting the tanker contract between the two rival teams.
  • The tanker wings would be built at Airbus' Broughton plant in Flintshire, while the aircraft would be assembled in Mobile, Alabama.
  • Ryanair's chief executive Michael O'Leary made clear that the airline would never pay the full price of £50m per plane, with the airline seeking a massive discount.
  • The Pentagon wants to start a new competition for the tanker contract this year, despite previous efforts to award the contract to a single supplier.

Statistics:

  • The value of Ryanair's potential order is estimated to be around £5bn at a 50% discount price.
  • The contract for airborne refuelling tankers is worth £27bn.
  • The price of building a single plane is approximately £50m.
  • The tanker contract, if awarded to a single supplier, would be the largest aircraft order in history.
  • The value of the US defence budget is over £500bn.

Sources:

  • "Airbus 'refused' Ryanair bid for 200-plane contract" by David R. Jones, Daily Post (exact format not provided)
  • "Top US Democrat calls for tanker deal to be split" by Justin Scheck and Cameron Meierhofer, Reuters (exact format not provided)
  • Parliamentary record of John Murtha's call to consider splitting the tanker contract (no specific source format provided)