Budget airline announces deal with Boeing to buy 175 planes




1. Close of models of Ryanair planes on table, zoom out to reveal Ryanair CEO Michael O'Leary and the head of Boeing's commercial airplanes division, Ray Conner seated at table
2. Close of O'Leary signing paper
3. Wide of briefing
4. SOUNDBITE: (English) Michael O'Leary, Chief Executive Officer of Ryanair:
"We believe this order of 175 aircrafts will help Ryanair sustain our low cost leadership in Europe. The 189 seats is a key unit cost and price advantage over the Airbus 8320 which is only 180 seats. And it means that adding them to our existing fleet of 300 aircraft we continue to benefit from aircraft crew spares and maintenance commonality."
5. Wide, shaking hands holding the order agreement
6. Close of the agreement document
7. SOUNDBITE: (English) Ray Conner, Chief Executive Officer of the Boeing Company:
"The eight-seven (787) situation had no bearing on this at all. We absolutely cherish this partnership, and when Michael and I started these discussions we were both committed to trying to find a solution here so we could get this thing completed."
8. Close of model of Ryanair plane
9. Mid of Ryanair banner
STORYLINE:
European discount airline Ryanair announced on Tuesday that it will buy 175 of Boeing's popular 737 jets, the largest order ever placed by a European carrier.
Ryanair CEO Michael O'Leary said the deal will allow his airline to expand in markets such as Germany, Spain, Italy, Poland and Scandinavia.
Neither side disclosed the purchase price for the 737-800s, but O'Leary said it did negotiate a bulk discount off the total list price of 15.6 (b) billion US dollars.
Ryanair already operates a fleet of 305 Boeing 737-800 Next Generation aircraft.
It is Boeing's biggest European customer for the model, which launched in 1997 and faces global competition from the Airbus A320.
Both are single-aisle aircraft with cabins that typically carry 150 to 200 passengers.
O'Leary said 75 of the new-order 737s would replace older airplanes, but the fleet would grow to 400 by 2019.
He said Ryanair expected its passenger volume to grow around 20 percent to 100 million passengers by 2019, by which time its workforce would expand from 8,500 to around 11,500.
O'Leary has spent years playing hardball with Boeing to secure the best possible price for his next bulk order.
In 2009, O'Leary noisily withdrew from talks to purchase more 737s and hinted that Ryanair might turn to Airbus.
But both sides sang each other's praises Tuesday.
The purchase contract for much of Ryanair's current Boeing fleet was agreed in the months following the 9/11 terrorist attacks, when airlines struggled to place new orders, and later Ryanair regulatory filings in Dublin confirmed that it received a 53 percent discount off Boeing's list prices.
Industry analysts said Ryanair was almost certainly paying less than half price.
Conner said the problems with the 787 Dreamliner's batteries had "no bearing on this (deal) at all."
Ryanair is one of the world's wealthiest airlines, with more than 3 billion euros (4 billion US dollars) available in cash.
Its business model offering internet-only sales of low-fare tickets, accompanied by a panoply of extra charges for credit card payments, checked baggage, boarding cards and reserved seats, is increasingly copied in the industry.
Tuesday's deal is welcome news for the Chicago-based Boeing Co. which has struggled since its new 787 Dreamliner was grounded by regulators in January following problems with its electrical system.
It was also dealt a major blow on Monday in the race to win the single-aisle plane market when Indonesia's Lion Air signed a deal with rival Airbus for 234 A320s.

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