Strategic Movements: December 2020

Boeing 737 Max Price?

What is the price of a new Boeing 737? It lists near $125 million a plane, but commercial aircraft are reported to typically sell for half their list price. On December 3rd, two weeks after the FAA cleared the 737 Max for passenger flights, Michael O’Leary, CEO of Ryanair, placed an order for 75 additional units. Given his penchant for making acquisitions when prices are at near rock-bottom and assets are in distress, it is likely he negotiated an even deeper discount. And, given the challenges Boeing has experienced with bringing the 737 Max back into the market, we can suspect they were looking to make a deal. Maybe … $50 million a pop? Only Ryanair and Boeing know. Ah, the joys and challenges of tactical discounts and rebates: they murky the market and wreak havoc on revenue, but sometimes they are necessary for driving the business forward. Southwest Airlines: will you try the same?

COVID-19 Drives Demand for …. Boats?

MasterCraft Boat Holding Inc., maker of recreational boats, posted a larger than expected profit in November 2020.  Early in the pandemic, MasterCraft had to shutter some production. Later in the pandemic, they ramped up production to meet high demand. Apparently, with hotels and resort destination demand down as families sought to isolate in their nuclear social-distanced bubbles and avoid the COVID, they found a penchant for boating. Water skiing is fun.