$15.6 Billion Boeing Order From Ryanair
03-19-2013, 05:17 AM
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$15.6 Billion Boeing Order From Ryanair
DUBLIN — Ryanair announced a $15.6 billion order for 175 passenger jets from Boeing on Tuesday, good news for the struggling plane maker that will allow Ryanair to consolidate its position as Europe’s dominant low-cost carrier.
The order, for the current generation 737NGs, keeps Ireland-based Ryanair one of the few remaining all-Boeing airlines. On Monday, Lion Air of Indonesia dealt a blow to Boeing by switching to rival Airbus in a $24 billion order.
The deal, signed in New York on Tuesday, will allow Ryanair to increase its fleet to 400 planes from 300 at present, as old planes are retired. Capacity will grow by 25 percent to 100 million passengers per year by 2018, Ryanair said.
Michael O’Leary, the Ryanair chief executive, has developed a reputation for securing bargain aircraft orders during industry slumps. He declined to say how much of a discount he secured for the order, but he said Boeing’s struggles with the 787 had created an opportunity for both sides.
“This deal embeds our cost advantage and pricing advantage over our European competitors and they all understand that,” Mr. O’Leary said in an interview. “Hopefully, it will help refocus people’s minds on the fact that Boeing continues to deliver great aircraft and is growing strongly, rather than a minor issue on the 787.”
The industry benchmark 737-800 model has a list price of $89.1 million, but large orders attract steep discounts and industry appraisers value the plane closer to $40 million.
The 737NG family includes the -600, -700, -800 and -900 series of Boeing’s 737 short-to-medium range, narrow-body airliners. Its main competition is the Airbus A320.
The Ryanair order is timely for Boeing, which last week won American approval for test flights for its new 787 Dreamliner, which has been grounded for two months after batteries burned on two of the planes in January.
The Ryanair deal will also provide Boeing with a smooth transition to its new 737 Max aircraft, scheduled to enter service in 2017.
Boeing and Airbus are upgrading their medium-haul passenger models to offer about 15 percent fuel savings from the middle of the decade, raising the prospect of bargains on the outgoing models to help manufacturers ensure steady production.
Mr. O’Leary said the fact that the 737 provided nine more seats than the A320, which is due to be revamped with fuel-efficient engines in 2016, was more important to Ryanair than any possible fuel savings.
The order, for the current generation 737NGs, keeps Ireland-based Ryanair one of the few remaining all-Boeing airlines. On Monday, Lion Air of Indonesia dealt a blow to Boeing by switching to rival Airbus in a $24 billion order.
The deal, signed in New York on Tuesday, will allow Ryanair to increase its fleet to 400 planes from 300 at present, as old planes are retired. Capacity will grow by 25 percent to 100 million passengers per year by 2018, Ryanair said.
Michael O’Leary, the Ryanair chief executive, has developed a reputation for securing bargain aircraft orders during industry slumps. He declined to say how much of a discount he secured for the order, but he said Boeing’s struggles with the 787 had created an opportunity for both sides.
“This deal embeds our cost advantage and pricing advantage over our European competitors and they all understand that,” Mr. O’Leary said in an interview. “Hopefully, it will help refocus people’s minds on the fact that Boeing continues to deliver great aircraft and is growing strongly, rather than a minor issue on the 787.”
The industry benchmark 737-800 model has a list price of $89.1 million, but large orders attract steep discounts and industry appraisers value the plane closer to $40 million.
The 737NG family includes the -600, -700, -800 and -900 series of Boeing’s 737 short-to-medium range, narrow-body airliners. Its main competition is the Airbus A320.
The Ryanair order is timely for Boeing, which last week won American approval for test flights for its new 787 Dreamliner, which has been grounded for two months after batteries burned on two of the planes in January.
The Ryanair deal will also provide Boeing with a smooth transition to its new 737 Max aircraft, scheduled to enter service in 2017.
Boeing and Airbus are upgrading their medium-haul passenger models to offer about 15 percent fuel savings from the middle of the decade, raising the prospect of bargains on the outgoing models to help manufacturers ensure steady production.
Mr. O’Leary said the fact that the 737 provided nine more seats than the A320, which is due to be revamped with fuel-efficient engines in 2016, was more important to Ryanair than any possible fuel savings.
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