Ryanair to expand by 30% with bumper Boeing order
- 19 March 2013
- From the section Business
Ryanair is planning to increase its aircraft fleet by a third to 400 planes after placing an order with Boeing for 175 planes worth $15.6bn (£10.3bn).
The airline currently has 305 planes. The order will allow older ones to be retired.
The move is a boost for the US planemaker after rival Airbus received a record $24bn order from an Indonesian airline on Monday.
Ryanair hopes to increase its passenger numbers to 100 million a year.
Ryanair, which has has always favoured Boeing aircraft and remains one of the few all-Boeing carriers, said it had received a discount on the price, but did not reveal how deep a discount.
The order is for the current generation 737s, whose 737-800 model list price is $89.1m, but large orders typically involve a discount, which could cut the price paid to half that.
The deal softens the missed opportunity from Indonesia's Lion Air, as that company had previously given Boeing its own record order.
Boeing's reputation has taken a blow in recent months after its latest Dreamliner 787 planes were grounded after batteries on some planes emitted smoke.
Flights of these are expected to restart within weeks.
Boeing's head of commercial airplanes Ray Conner said at a joint news conference with Ryanair on Tuesday that the problems with the 787s had not affected orders.
He added that they were working hard to get the issue sorted out.
Ryanair chief executive Michael O'Leary said he was happy to back Boeing: "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."
Donal O'Neill, an analyst with Goodbody Stockbrokers in Dublin, said the order was good for both sides: "This order puts Ryanair back on track for growth at a time when many European airlines are shrinking.
"For Boeing it keeps a major customer on board and helps position it to hook Ryanair for an order of the [next-generation] 737-Max in a few year's time."
Boeing 737s compete mainly with Airbus's A320s in the short-to-medium range, narrow body jet market.
Ryanair's expansion is expected to have taken place by 2018 and the company said if demand kept growing it could build further on the order with another.
Ryanair's shares were 4% higher in afternoon trading, while Boeing's were 0.5% higher.