ANALYSIS: Boeing Customers Making Their Concerns Loud And Clear

Irish businessman Michael O’Leary has never been one to mince his words. But when it comes to talking about Boeing, his words have become X-rated.

The Ryanair Group CEO—one of the largest purchasers of Boeing 737s—ended negotiations with Boeing for the 737 MAX 10 in September after the two sides could not agree on a price. As usual, O’Leary issued strong public statements on why he did not go along with Boeing’s pricing strategy, while Boeing issued a far shorter statement saying the manufacturer would “continue to be disciplined and make decisions that make sense for our customers and our company.”

In mid-May, however, the rhetoric from Ireland heated up to new levels, while Boeing stayed silent. O’Leary released a torrent of expletive-soaked statements after saying the ultra-LCC would have to cut some of its spring and summer schedules because MAXs from earlier orders that were originally set for delivery by the end of April had been delayed to the end of June.

“At the moment we think Boeing management is running around like headless chickens, not able to sell aircraft, and then even the aircraft they deliver, they’re not able to deliver them on time,” O’Leary fumed in a sentence that was rare for its lack of an expletive. 

He also questioned “what the hell their sales team has done in the last two years?” and added that “either the existing management needs to up its game, or they need to change the existing management, would be our view of life.” Much of his other remarks were unpublishable in this magazine.

Ryanair has almost 500 737s in service and more than 140 on order. The airline stuck with Boeing through the horrors of the MAX crashes, grounding and recertification. The aircraft that were delayed this year are whitetail MAXs that other airlines canceled in the aftermath of the fatal crashes. While O’Leary’s public thrashing was far from diplomatic, it’s difficult to see how Boeing can defend itself, so silence is probably the only option.

And O’Leary is not alone among airline and leasing company chiefs who are becoming increasingly frustrated—if not bewildered—at Boeing Commercial’s ongoing disarray. 

After Boeing announced in late April that it would delay the start of 777-9 deliveries from the end of 2023 to 2025, Emirates Airline president Tim Clark—an early supporter of the 777X program—said he was skeptical of the new date and pointed out that with the multiple delays, the 12 aircraft that Boeing has already built for Emirates will be seven years old by 2025. He said they would effectively be “second hand” for which a new price would be necessary. 

But the bad news in the April announcement went far beyond the 777X. Boeing is still working through 737 MAX and 787 production and certification issues that are affecting delivery schedules. The company delivered 28 MAXs in April, below its stated long-term target of clearing out an inventory of completed aircraft that stood at 320 at the end of March. 

To clear out its backlog of MAXs by the end of 2023, as the company has indicated it intends to do, Boeing must make monthly delivery totals equal to the running production rate plus 15 or 16 aircraft. So far, it has not hit that mark.

Of the 777X delay, Boeing president and CEO David Calhoun said, “Are we frustrated with the timing? You bet.”

But for many customers, Boeing’s frustration should not be their concern. More than ever as they emerge from a crippling pandemic, they want certainty and dependability from their key suppliers. 

Without it, they will delay new aircraft purchase decisions, cancel existing orders or demand new terms on those orders. 

And they want to focus on their own frustrations, not Boeing’s.

Air Lease Corp. executive chairman Steven Udvar-Hazy publicly acknowledged that he saw risk to the 777X program with each delay and said ALC had decided against buying the freighter version because there were “too many questions and delays.” 

Avolon CEO Domhnal Slattery said Boeing had “lost its way” and wondered aloud whether a change in leadership was needed.

But there are still big names staying loyal to Boeing and its products, including Alaska Airlines, International Airlines Group, Lufthansa and Southwest Airlines, which firmed or added to MAX orders in 2021. 

And the truth is that no airline or lessor wants to see an aircraft supplier monopoly emerge. Whether they prefer Airbus or Boeing aircraft, it’s in everyone’s interests to have a competitive market in which all competitors are strong.

It may be months or even years before Boeing wades out of its production, certification and cultural mess. For the most part, however, their customers can only lament—in some cases, publicly and with an abundance of frustrated, X-rated language.