Boeing vs. the Bully

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For years, airline investors have been talking about "it." The rumored 200-airplane order that Ryanair (Nasdaq: RYAAY  ) chief Michael O'Leary supposedly wants to place with either Boeing (NYSE: BA  ) or Airbus. The order that's supposed to catapult Ryanair to double its size in a decade.

Boeing wants Ryanair's business, but it may not get it.

Famous for his hardball negotiating tactics, O'Leary has been hedging on precisely whose airplanes he's interested in buying, playing for time... and price concessions. This week, he cranked up the pressure to 11, trashing Boeing in a conference with industry analysts -- and threatening to take his business to China if Boeing can't give him what he wants. O'Leary offered few choice gems.

On Commercial Aircraft Corp. of China, or COMAC:
"If [COMAC's] C919 gets delivered by 2016 ... the Chinese will take a huge amount of orders away from Airbus and Boeing."

"If [COMAC] deliver[s] a 199 or a 200 seat aircraft then it does not matter what Boeing do[es] ... We would be all over [COMAC] like a rash."

On Boeing's new 737 MAX:
"They have not yet designed the aircraft. They cannot tell us what the operating costs will be because it is not designed."

"They do not know where they are going to build it yet, they do not know when it is going to fly either ... But they do assure us that they will be able to answer those questions by the end of November."

Pretty rough stuff. O'Leary's point is clear: If Boeing won't play ball, Ryanair has other options. It could go with Airbus' new A320neo airliner, which offers optional engines from either United Technologies (NYSE: UTX  ) or General Electric (NYSE: GE  ) through its joint venture with Safran. But it's not opposed to considering off-the-wall options like COMAC, too. And the threat has teeth. In years past, Ryanair has flown planes from less-well-known makers, such as Britain's Hawker Siddeley, Italy's ATR, and Brazil's Embraer.

The truth, though, is that Ryanair would almost certainly prefer to stick with Boeing. Like Southwest in the U.S., Ryanair operates an all-Boeing fleet today. And like Southwest, it keeps maintenance costs low by flying just one maker's plane. The fact that O'Leary tossed his sharpest barbs at Boeing, rather than Airbus, also looks like a "tell" that reveals the CEO's real preference.

Seems to me, this contract is still Boeing's to lose -- if it doesn't lose its nerve.

Will Ryanair ever make a decision on this two-year-old contract negotiation? Can Boeing "bring O'Leary down" safely to the tarmac? Add Boeing to your Fool Watchlist, and find out.

Fool contributor Rich Smith owns shares of Southwest Airlines. Motley Fool newsletter services have recommended buying shares of Embraer and Southwest Airlines. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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