Boeing wins US$15b jet order from Ryanair

Order for the 737 gives boost to planemaker as customers shift sights to the new Max model

PUBLISHED : Wednesday, 13 March, 2013, 9:43am
UPDATED : Thursday, 14 March, 2013, 7:26am

Boeing won a jet order from Ryanair valued at US$15.1 billion at list price, selling 170 of its 737 model as that aircraft is phased out in favour of the Max version, according to people familiar with the matter.

The deal between Boeing and Dublin-based Ryanair might be announced as soon as next week, said the people, who asked not to be identified because the talks are not public. Airlines typically buy at a discount to the catalogue price, which is US$89.1 million for the 737-800, now the top seller in Boeing's line-up.

Winning an order for the current 737 variant, known as the NG, is a boost for Boeing because airlines are shifting their sights to the Max and its more-efficient engines. The Chicago-based firm is preparing to introduce the 737 Max in 2017 to compete with Airbus' upgraded A320neo.

"We've had the strategy of getting Max customers to also commit to NGs, and that's paid off," Boeing's marketing chief Randy Tinseth said on the sidelines of the International Society of Transport Aircraft Traders conference in Orlando, Florida. He declined to comment on the Ryanair order.

Robin Kiely, a Ryanair spokesman, said the airline "does not comment upon, or engage in, rumour or speculation". The Irish Independent newspaper reported on Tuesday that Ryanair had placed a Boeing order for as many as 200 aircraft in a deal to be signed next week.

Boeing rose 1.5 per cent in New York on Tuesday. The shares have gained 12 per cent this year, topping the 8.9 per cent advance for the Standard & Poor's 500 Index even while the planemaker works to end the grounding of its wide-body 787 Dreamliner.

Ryanair's order, its largest, also ensures the airline will remain an all-Boeing operator, although the choice of the NG over the Max reflects chief executive Michael O'Leary's scepticism of the new model. O'Leary has questioned the capacity of the Max, as well as its efficiency and waste-handling costs.

The Boeing order positions Europe's biggest discount carrier to meet a target to carry 120 million passengers over 10 years, up from 79.9 million in 2012.