Ryanair buys Boeing jets worth $4 billion

/ Source: The Associated Press

Ryanair Holdings PLC said Thursday it has ordered 70 planes in a $4 billion deal with Boeing Co. and has taken the option to buy 70 more, signaling that the budget airline is continuing its rapid growth across Europe.

The deal is also a coup for U.S. manufacturer Boeing in its long-running rivalry with European consortium Airbus to dominate the aerospace market.

Ryanair said most of the 70 firm orders for the Boeing 737-800 series of aircraft will be delivered between 2008 and 2012, allowing the carrier to maintain its planned double-digit growth during the latter years of this decade.

The agreement, which is subject to shareholder approval, brings the total Ryanair order book with Boeing to 225 firm orders and 193 options.

Ryanair said it will have taken delivery of about 100 new Boeings — from an original order of 155 — by the end of 2005.

Ryanair Chairman David Bonderman said the airline considered the Boeing 737-800s — introduced into the Ryanair fleet in 1999 — to be the most efficient narrow-body short-haul aircraft available.

“The 737-800 has significantly reduced our unit operating costs and allowed us to reduce our air fares each year for the last five years,” Bonderman said.

Mike Marino, chief executive of Aviation Partners Boeing, a Seattle-based joint venture, said the significance of the order “is huge and it really pushes us over the top as far as critical mass goes,” given Ryanair’s position as the largest low-cost carrier in Europe.

Chicago-based Boeing has staked its future on industry deregulation and smaller, long-range planes like its planned two-aisle 787 Dreamliner — scheduled to debut in 2008 — that will allow passengers increasingly to fly direct, spurning stopovers at hub airports.

France-based Airbus sees a future based on demand for massive planes to transport a growing number of passengers. It unveiled the world’s largest commercial jet, the double-decker A380 “superjumbo,” in January.

Ryanair said the new order of Boeing jets, combined with a new pricing structure, would help the airline push unit operating costs — excluding fuel — lower for the next five years.

“This will enable Ryanair to offer even lower fares and underpin our growth strategy as we plan to double traffic from 34 million passengers in 2005-06 to more than 70 million passengers in 2011-12,” Bonderman said.

Ryanair said the 70 new aircraft will also create more than 2,500 jobs at the airline, principally at its existing 12 European bases, with the remainder at the 10 or more new bases it plans to develop over the next seven years.

The carrier has been aggressive in opening new routes in recent months. It currently operates 220 routes across 19 countries.