Boeing strike to further delay Ryanair aircraft deliveries
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Budget airline Ryanair has been told by Boeing that production on its new planes is likely to be disrupted for two to three weeks after the end of the current strike, Ryanair Group Chief Executive Michael O'Leary has said.
Furloughs at Boeing began on Friday for thousands of employees in Washington State and Oregon, after more than 32,000 workers went on strike the previous week, halting production of the US planemaker's best-selling 737 MAX and other jets.
"Boeing are telling us that the strike will delay aircraft deliveries by the length of the strike plus two or three weeks," Mr O'Leary told a news conference, estimating the strike would last two to four weeks.
He said Ryanair had been assured by Boeing that the timing of the delivery of 30 737 MAX jets due by next June would not be affected if the strike ended within three to four weeks.
"We're not sure, though, that we necessarily believe that but we have no choice other than to work with Boeing once the strike is over to help them to increase production and catch up the three, four, five, six weeks of delays,” he said.
Earlier this month O'Leary said a combination of existing backlogs and a prolonged Boeing strike could cut the number of aircraft it receives by next summer to 20. Asked about that comment, he said Ryanair was still working on the assumption all 30 would be delivered.
In an attempt to bring the strike to an end, Boeing reportedly took a 30% pay rise proposal directly to striking workers.
The proposal is an improvement over the initial 25% increase turned down earlier this month by members of the International Association of Machinists and Aerospace Workers, but still less than the 40% initially sought by the union.
Boeing said the terms are final and only valid until the end of September 27.
IAM District 751 President Jon Holden said his negotiating team was blindsided by the move. The union has no intention of putting the offer before rank-and-file members for a vote because doing so isn’t feasible on such short notice, he said.
“Setting up a vote for 33,000 people isn’t just something you snap your fingers on,” Holden said in an interview. Union leaders also want to talk to members about the offer, he said, cautioning that it doesn’t meet the members’ needs.
In a statement posted online, IAM District 751 said that by skirting the collective bargaining process, “Boeing took it upon itself to disrespect our entire union.”
The sparring injects new tension to talks that have been at a standstill since September 18, when two days of federal mediation yielded little progress. After workers voted almost unanimously to strike earlier this month, the local district said it intended to push for a substantially higher wage increase and for Boeing to reinstate a defined benefit pension plan for members.
Boeing shares have tumbled 40% in value this year, the second-worst performance in the Dow Jones Industrial Average.
The conflict has shut down production of Boeing’s cash-cow 737 MAX and other jetliners, and could drain an additional $1.3bn (€1.16bn) in cash from the company each month, according to Jefferies analyst Sheila Kahyaoglu.
As Boeing risks losing its investment-grade credit rating, the planemaker has begun to furlough workers and take other steps to preserve cash during the strike. Senior managers, including new chief executive Kelly Ortberg, have also agreed to take pay cuts for the duration of the furloughs.