Ryanair begins talks on $4bn deal to add 70 planes to fleet
Wednesday November 07 2007
RYANAIR has begun early negotiations on adding 70 planes to its fleet between 2010 and 2012, in a deal that could be worth up to $4bn.
In February 2005, Ryanair secured options to buy the 70 extra planes from Boeing between 2010 and 2012.
Speaking earlier this week, Ryanair chief executive Michael O'Leary confirmed that discussions on those options have begun recently.
"Boeing are very keen at the moment now to firm up an order book into and beyond 2012," Mr O'Leary said.
"We are talking to them about our options in '10, '11 and they are kind of anxious that we would look at taking more aircraft beyond 2012.
Ryanair has until 2008 to confirm the options, with deliveries potentially starting in 2010.
"The first round of discussion, so, we're making unreasonable demands and Boeing are giving us some reasonable rejections," Mr O'Leary said. "But the process has started, which I think is better than not talking at all." Ryanair's chosen aircraft, the Boeing 737-800, has a list price of about $60m, valuing a deal at up to $4.2bn.
Ryanair is known for securing cheap aircraft, most prominently after the aviation craft following 9/11, so the actual price is likely to be substantially lower.
Meanwhile, Ryanair deputy chief executive Michael Cawley has confirmed that Ryanair's Belfast flights are contingent on the airport improving its runway so that it is able to land full Ryanair airplanes.
The low cost carrier puzzled commentators when they began expanding out of Belfast City this autumn, since Belfast City's short runway can means Ryanair's 189 seater planes can take off with just 140 passengers.
"[Prior to the deal] Belfast gave a very clear understanding that they will improve the runway," Mr Cawley said earlier in the week.
"You can take it that we'll review our operations if that doesn't happen".
He added that once the runway was expanded to cater for full planes that would open up the potential for further Ryanair flights from Belfast.
The airline's current offering from Belfast includes East Midlands, Glasgow, Stansted and Liverpool.
On Dublin, Mr Cawley said that Ryanair had recently written to the Dublin Airport Authority to tell them it was "unwise" to carry on building the second terminal while Ryanair's injunction against its planning permission was pending. "If they carry on awarding contracts and then the thing is over-turned by the courts, they could be in a big trouble then," he added.
Sources in the Dublin Airport Authority confirmed that building would continue unless the airport was legally required to halt works.
- Laura Noonan
