Saturday 27 December 2014

Ryanair places $22bn order with Boeing, buys up to 200 new aircraft

Published 05/09/2014 | 14:46

Ryanair has signed an agreement with Boeing to purchase up to 200 new Boeing 737 MAX 200 “gamechanger” aircraft - comprising 100 firm orders and 100 options.

When the agreement is finalised and all options exercised, this deal will be worth over $22bn at current prices and the first delivery will be 2019.

Ryanair
Ryanair
Ryanair, 3D imagery, 737 MAX,

This means that Ryanair will be the lead customer for this new aircraft  - giving the airline a 197 seat capacity which is eight more than Ryanair’s existing 737-800s.

The airline said today that these environmentally friendlier planes will further reduce Ryanair’s industry leading low costs, and these savings will be passed on via lower fares to Ryanair’s customers.

Passenger numbers are expected to grow from 82m in 2014 to over150m customers per annum by the end of the delivery stream in 2024.

This latest agreement comes on the day before it takes delivery of the first of 180 new Boeing 737-800 aircraft.

The current 180 aircraft order means Ryanair's order grows from 304 to 420 (allowing for lease returns).

"These new “gamechanger” aircraft will allow Ryanair to lower our costs and airfares, while improving our customer experience with more leg room and the Boeing Sky Interior, as we roll out new offers, particularly for our Business Plus and Family Extra customers," said  chief executive Michael O'Leary.

"As many of Europe’s flag carriers cut capacity on short haul routes, Ryanair looks forward to using these new Boeing 737 MAX 200 aircraft to grow at many more of Europe’s primary airports."

Boeing Commercial Airplanes President and chief executive Ray Conner said: “The 737 MAX 200 is the perfect fit for Ryanair, providing improved efficiencies, 20pc lower emissions, increased revenues and a high level of passenger comfort.

"The new variant will play a significant role in enabling the airline to continue to expand its operations, while providing passengers across Europe with outstanding value. For everyone at Boeing, it is an honour to launch the 737 MAX 200 with Ryanair, one of the world’s most successful all-Boeing operators.”

The move comes two months after Boeing said it was studying plans to offer more seating in its upcoming 737 MAX by introducing a modified version with 200 seats, 11 more than the current maximum, sources told Reuters.

It also comes months after Ryanair expanded a previous order for the existing 737 to 180 aircraft, a new order Europe's biggest no-frills carrier would mark a new phase in efforts by Boeing and European rival Airbus to appeal to ultra-low cost carriers.

Both manufacturers are adding seats to drive down the operating costs per seat, the key driver of aircraft economics.

In June, Airbus said it would increase the maximum number of seats on its revamped A320neo to 189, matching the capacity limit on the main variant of Boeing 737 MAX and providing fuel savings of 3.5 percent per seat.

Weeks later, Boeing leapfrogged its European rival by announcing plans to offer a 200-seat version of the 737-8 MAX, which Boeing Commercial Airplanes Chief Executive Ray Conner said would offer unspecified cost savings of 5 percent per seat.

One industry source said Ryanair was expected to place a large order for the modified version of 737-8 MAX and that this could happen "soon".

Ryanair uses solely Boeing aircraft but has so far held back joining a wave of orders for the next generation of fuel-saving 737 MAX aircraft with newer engines, saying it wants more seats.

In July, Chief Executive Michael O'Leary welcomed the decision to study a higher-density version and said he would maintain the existing order for 180 aircraft.

"We will take those aircraft as is, but for the next round of aircraft, (for the period) 2019 to 2025, we are looking at the 189-seat Airbus or what I hope will be a 197- to 198-seat 737," he was quoted as saying by Flightglobal.

Reuters

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