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Ryanair (NASDAQ:RYAAY) just fired a warning shotand it landed squarely on Boeing's (NYSE:BA) front porch. CEO Michael O'Leary says the airline could cancel its jaw-dropping $33 billion order for 330 Boeing jets if U.S. tariffs start driving up prices. His message? If the aircraft get more expensive because of politics, Ryanair will walk. O'Leary made it clear in a letter to Congressman Raja Krishnamoorthi: Ryanair isn't in the business of paying for Washington's trade wars. And if Boeing loses its price edge? He's open to alternativeseven China's Comac.
This isn't a bluff. Ryanair already flies over 600 Boeing 737s and has deliveries scheduled deep into the next decade. But as the global supply chain gets hit by rising fees and airline execs scramble to avoid tariff landmineslike Delta (NYSE:DAL) rerouting Airbus (EADSY) deliveries through TokyoO'Leary is reminding everyone that lowest cost wins. Always. He's not buying into the geopolitics. He's buying based on numbersand he's not ruling out anyone who can give him better terms, whether it's Airbus or a Chinese manufacturer.
The bigger concern? Retaliation. While China's already slapped back at the U.S., the EU could be next. That's where the real pressure hits. Tariffs may have skipped the aviation sector since 1979, but the buffer is eroding. O'Leary's bottom line is blunt: Ryanair isn't in this for nationalismit's in it for survival. And if Boeing and the U.S. want to keep Ryanair in the fold, they'd better keep the pricing sharp.
Is this just tough talkor the start of a seismic shift in global aircraft deals? Let's wait and see.
This article first appeared on GuruFocus.