DUBLIN (dpa-AFX) - Aerospace and defense giant Boeing Co. (BA) said Tuesday that it has received a commitment from Ireland-based low cost carrier Ryanair Holdings Plc (RYAAY, RYA.L) for 175 Next-Generation 737-800 aircraft. The deal, when finalized, will be worth $15.6 billion at list prices.
Upon approval by Ryanair's shareholders, the purchase will become Boeing's largest deal to date in 2013 and will also be the largest ever aircraft order from a European airline. Boeing said that after finalization, the deal will be posted to the Boeing Orders & Deliveries website as a firm order. According to the company's website, the 737-800 model is valued at $89.1 million at list prices.
The announcement confirms media reports last week that Ryanair was close to announcing a $15 billion order for about 170 aircraft from Boeing. The order for the 737-800 model aircraft, known as the Next-Generation or NG, will be the single-biggest aircraft purchase ever by Ryanair. The carrier has the largest fleet of Boeing airplanes in Europe.
Ray Conner, President and CEO of Boeing Commercial Airplanes said, 'This agreement is an amazing testament to the value that the Next-Generation 737 brings to Ryanair. We are pleased that the Next-Generation 737, as the most efficient, most reliable large single-aisle airplane flying today, has been and will continue to be the cornerstone of the Ryanair fleet.'
Separately, Ryanair noted that the 175 new airplanes will enable it to further lower cost and airfares, thereby widening the company's cost and price leadership over other airlines in Europe.
Michael O'Leary, CEO of Ryanair said, 'Ryanair is pleased to sign this agreement with Boeing to purchase 175 new 737-800 jets, which will expand our fleet to over 400 units, creating over 3,000 new jobs for pilots, cabin crew and engineers, while allowing us to grow our low-cost airline service by about 5 percent per annum over the next several years and take our traffic to 100 million passengers by March 2019.'
Ryanair said that about 75 of these new aircraft will replace some of its existing fleet of 305 Boeing 737s, while the remainder will drive new growth of Ryanair's fleet of young, highly efficient airplanes.
The order will deliver a boost to Boeing after the company won approval from the Federal Aviation Administration last week for plans to test and certify improvements to the battery system on its now grounded 787 Dreamliner fleet.
Ryanair's deal also comes after Airbus, the aircraft manufacturing subsidiary of European Aeronautic Defence and Space Co. or EADS NV (EADSY, EADSF), on Monday snared Indonesian low-cost airline Lion Air as a new customer from rival Boeing after pocketing an order for 234 eco-efficient A320 Family aircraft.
Lion Air's order includes 109 A320neo, 65 A321neo and 60 A320ceo, and is the largest ever order for Airbus in terms of the number of aircraft and the overall sum. The deal is valued at about 18.4 billion euros or $24 billion.
Meanwhile, Boeing plans to phase out the NG in favor of the new 737 Max version. The 737 Max builds on the strengths of the NG and incorporates the latest-technology CFM International LEAP-1B engines. The 737 Max is designed to compete with the Airbus' fuel efficient A320neo in the narrow-body aircraft segment.
In Tuesday's regular session, BA is trading at $85.53, up $0.35 or 0.41 percent on a volume of 320,632 shares. RYAAY is trading at $41.14, up $0.81 or 2.01 percent on a volume of 24,893 shares.
Copyright(c) 2013 RTTNews.com. All Rights Reserved
Copyright RTT News/dpa-AFX