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Ryanair closing in on $13-billion Boeing order

Ryanair Ltd.’s chief executive Michael O’Leary speaks to the media in Vitrolles, southern France, Jan. 16, 2013.

Claude Paris/AP

Low-cost Irish airline Ryanair Ltd. is closing in on a deal to buy at least 150 Boeing 737 passenger jets and the contract could be signed within weeks, industry sources said.

Ryanair said in a statement that a deal was unlikely to be signed until later in the year at the earliest.

Most or all of the planes would likely be current generation 737s rather than the upcoming Max upgrade, which would allow Ryanair to secure a significant discount on the list price, two of the sources said on Wednesday.

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A large order of current generation 737s would help Boeing Co. ensure no fall in production as customers hold out for the Max, scheduled to enter service in 2017. At current list prices, an order for 150 Boeing 737-800s would cost about $13-billion (U.S.)

Ryanair, Europe's top budget airline, has been in discussions with Boeing for years about a large order which it needs to help achieve its plan of increasing it annual capacity to 120 million passengers in 2022 from around 80 million today.

But spokesman Stephen McNamara said a deal was not imminent. "None is expected until perhaps the end of calendar 2013 or early 2014, at the earliest," he said in a statement.

Ryanair has exclusively used Boeing planes in the past and last year chief executive Michael O'Leary said it would likely order a combination of current generation Boeing 737 and its upgrade, the 737 Max.

The current generation is less fuel efficient, but that would have less of an impact on Ryanair's relatively short route lengths.

As Ryanair does not have a relationship with Airbus SAS it cannot use the strategy used by other airlines to play them off against each other.

Instead it has in the past tried to time significant orders for holes in Boeing's production schedule.

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Mr. O'Leary in 2002 secured an order of 125 planes in 2002 at discounts rumoured to be 40 to 50 per cent off list as Boeing struggled with a downturn.

The low aircraft cost has underpinned Ryanair's rapid seven-fold rise in passenger numbers in the decade since.

But talks over a 200-plane order broke down in 2009 at the last minute and Mr. O'Leary has been trying to secure a favourable deal with Boeing ever since.

A deal would be a boost for Boeing as it seeks to sort out problems with its new 787 airliner, which has triggered a wave of negative publicity.

Aircraft manufacturers often sell planes at lower prices immediately before a new generation of jet is released. A Boeing executive declined comment on a possible Ryanair order.

Ryanair chief financial officer Howard Millar told a conference on Wednesday the airline was in talks about the purchase of up to 200 Boeing aircraft, according to a delegate. The conference was closed to the media.

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