Europe’s pluckiest penny-pincher in the skies, Ryanair, has donned its boxing gloves this week and squared up to Boeing. In a letter to a senior US lawmaker, chief executive Michael O’Leary declared that if President Trump’s plan to impose tariffs goes ahead, Ryanair might just give Boeing the cold shoulder on its 330 737 MAX orders, worth over USD 30 billion on sticker price.
_0_0.jpg)
Image Source: https://centreforaviation.com/
In what might be described as a strongly worded message, Ryanair’s chief executive, Michael O’Leary, penned a letter to a senior US lawmaker that essentially reads like a “it’s not me, it’s your president” note.
“If the US government proceeds with its ill-judged plan to impose tariffs, and if these tariffs materially affect the price of Boeing aircraft exports to Europe, then we would certainly reassess both our current Boeing orders and the possibility of placing those orders elsewhere,” O’Leary wrote.
“It’s not personal,” quips O’Leary, “but if these tariffs materially affect the price of Boeing aircraft exports to Europe, then we would certainly reassess both our current Boeing orders and the possibility of placing those orders elsewhere.” The air is thick with tension—Ryanair already operates more than 600 Boeing 737s and has deliveries pencilled in well into the next decade.
Meanwhile, the prospect of courting China’s COMAC adds a dash of spice — a planemaker that’s yet to clear European certification but which might pique O’Leary’s interest if they undercut Airbus and Boeing on price. Airbus, mind you, is sold out until 2030, leaving Ryanair with very few suitors other than Boeing or perhaps that distant, yet-to-be-approved C919.
At the heart of this aerial fandango lies the tariff. Boeing’s aircraft, traditionally tariff-free thanks to long-standing industry norms, could suddenly attract a levy once ownership transfers to a European carrier and contracts reach completion. As one industry insider notes, “tariffs only become due once ownership of the aircraft has passed to the purchasing airline and the contract has been completed.”
Should the US impose, say, a 25 per cent import tariff on aluminium-made Boeing aircraft exports, that USD 30 billion order could balloon to nearly USD 37.5 billion — hardly pocket change for Ryanair’s scrupulous balance sheet. The result? O’Leary is threatening not just delivery delays (as he did previously) but outright cancellations, potentially sending Boeing scrambling to find other buyers for planes that Ryanair no longer wants at those inflated rates.
And Ryanair itself would face a right pickle: grounded growth, delayed network expansion, and the prospect of paying through the nose to secure replacement jets elsewhere. After all, with Airbus back-booked for years, COMAC’s C919 is smaller (150-190 seats versus the MAX 10’s up to 230) and untested by any Western operator. So, if Boeing’s prices take off thanks to tariffs, Ryanair’s expansion plans could well nose-dive.
Aircraft purchase contracts typically include a clause requiring each party to settle its own taxes, yet they don’t explicitly mention tariffs. With trade turbulence on the horizon, many manufacturers are poring over future deal wording to hedge against potential levies.
O’Leary’s missive may, therefore, be part theatre and part tactical leverage ahead of behind-closed-doors talks with Boeing. Having flirted with the idea of COMAC back in 2011 (albeit with no formal discussions since), Ryanair now dangles the prospect of a 10–20 per cent discount from COMAC to keep Boeing on its toes.
Cancel contracts outright? Planemakers will push back, citing supply-chain hiccups and other “excusable factors.” Delay deliveries? Boeing insiders once quietly assured O’Leary that aircraft would likely be exempt from tariffs. But with Trump’s trade war far from subsiding, Ryanair’s next moves could reshape the competitive map of single-aisle airliners—provided O’Leary is bluffing, or Boeing finally secures that precious tariff carve-out.
Responses
