Airline industry Quote by Siobhan Creaton
““Yet just days later Ryanair announced that it had placed one of the biggest-ever orders for Boeing’s 737 series aircraft. The company said it would purchase one hundred Boeing 737-800 aircraft in the next eight years and had taken options on fifty more planes, claiming that Boeing’s offer was ‘exceptionally competitive’. Ryanair said the ‘catalogue value’ of the deal was $9.1 billion, but refused to disclose the extent of the discount it had negotiated. Airline industry observers, aware of the US aircraft manufacturer’s desperate need to win the contract, speculated that it amounted to between 30 and 50 per cent. Boeing had been forced to sharply reduce its aircraft production and to lay off up to 30,000 workers as it struggled to stave off a financial crisis in the wake of the terrorist attacks. Some people who know O’Leary and Tony Ryan well suggest one of their great similarities is their ability to ‘corner their prey’.””
About This Quote
Ryanair secured a massive Boeing order at a deep discount, leveraging Boeing's financial distress after 9/11 to obtain favorable terms.
In simple terms: Strategic purchasing during a supplier's crisis.
Key Takeaway
Timing and leverage in negotiations.
Themes
Negotiation
Business Strategy
Aviation Industry
Crisis Management
Competitive Advantage
Mood
Analytical
Strategic
Cautious
Type
Analytical
Business
Industry Insight
When to use this quote
- Airline fleet expansion planning
- Supplier financial distress scenarios
- Competitive bidding processes
- Strategic cost reduction initiatives
Key Concepts
Discounted procurement
Supplier vulnerability
Market dynamics
Leadership tactics
Practical Applications
- Negotiating large contracts with distressed suppliers
- Assessing supplier health before procurement
Questions to Reflect On
- How can companies identify and exploit supplier vulnerabilities ethically?
- What risks arise from relying on heavily discounted assets?
