Hear CEO admit Boeing 'probably shouldn't have' made Air Force One deal with Trump
New York (CNN Business)The CEO of Ryanair let loose a scathing, obscenity-laden attack on Boeing management Monday, saying company executives need either an immediate “reboot, or a boot up the a**.”
“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,” said Michael O’Leary, CEO of Ryanair, Europe’s largest discount carrier, which has ordered nearly 400 jets from Boeing since 2010.
O’Leary and Boeing had an unusually public dispute last fall about negotiations on a possible order for the next generation of the 737 Max, with Ireland-based Ryanair breaking off talks because of a pricing squabble.
The CEO’s unusually blunt comments Monday were focused on Boeing’s delayed deliveries of planes. O’Leary said Ryanair had to scale back its spring and summer schedules because planes it had expected the aircraft maker to deliver by the end of April probably won’t arrive until the end of June.
He was livid about the delays, especially because Ryanair is purchasing planes known as white tails, which Boeing had built for other airlines. The original purchaser of those planes canceled the order during a prolonged 20-month grounding of the 737 Max that followed two fatal crashes.
“I can understand why there may be various challenges manufacturing new aircraft, but aircraft that you built and made two years ago that all you had … to do was put petrol in them and f***ing fly them to Dublin, really I don’t understand why you’re taking two to three month delays on that,” he said on a conference call with investors about the airline’s financial results. “It is redolent of very poor management performance in Seattle.”
Boeing declined to comment on O’Leary’s remarks.
O’Leary said Boeing makes great planes, but it might be time to change management.
“Either the existing management needs to up its game, or they need to change the existing management, would be our view of life,” he said. “We’re very happy to work with existing management but they need to bloody well improve on what they’ve been doing delivering to us over the last 12 months. … We’re a willing customer, but we’re struggling with slow deliveries and an inability to do a deal on new aircraft despite the number of white tails they have sitting on the f***ing ground in Seattle.”
Boeing has faced numerous problems in recent years, including the 737 Max crisis that cost it more than $20 billion. The company also was hit with an FAA-ordered halt of deliveries of its 787 Dreamliner last June due to quality control problems. And it faced delays winning approval for its next-generation widebody jet, the 777X, that forced Boeing to push back the first deliveries of the plane by two years to at least 2025.
Boeing also took substantial losses in its military and space businesses, including a recent $660 million charge on the two planes it is completing that will be used as the new Air Force Ones. It’s also combating delays in building a spacecraft to carry US astronauts to the International Space Station.
“If they get their s*** together, we’d be willing to take more aircraft for summer ’23 and summer ’24,” O’Leary said. “There’s growth there to be won.”
He also said the airline is willing to restart negotiations on an order for the new generation of the 737 Max, although he pointed out that has yet to win FAA approval, making it risky to depend upon. So Ryanair is also looking at possibly purchasing 50 jets on the second hand market instead. And he had choice words for Boeing’s sales staff.
“You wonder what the hell their sales team has done in the last two years,” O’Leary said. “Frankly most of them seem to sitting at home in their f***ing jimjams working from home instead of being out there selling planes to customers.”
O’Leary also criticized Boeing’s recently announced plan to move its corporate headquarters from Chicago to Arlington, Virginia, a suburb of Washington.
“Moving the headquarters to Virginia from Chicago, while it may be good for the defense side of the business, doesn’t fix the fundamental underlying problems on the civilian aircraft side in Seattle,” he said.
Other customer criticism
In addition to O’Leary, several other airlines have complained on recent conference calls — although in far less colorful language — about the problems they face from the 787 or 777X delays.
Domhnal Slattery, the CEO of Avolon, one of the world’s leading aircraft leasing companies, suggested earlier this month that Boeing needs a change in culture — and maybe leadership.
“I think it’s fair to say that Boeing has lost its way,” Slattery said at the Airfinance Journal conference, in comments first reported by Reuters and confirmed by Avolon. “Boeing has a storied history … They build great airplanes. But it’s said that culture eats strategy for breakfast and that is what has happened at Boeing.”
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