Europe's largest low-cost airline has bought 70 Boeing 737's in a deal worth over four billion dollars.
Irish carrier Ryanair and Boeing have confirmed the deal worth $4.6 billion which will see the airline double its passenger capacity by 2012.
Ryanair expects to take delivery of the 737-800s between 2008 and 2012.
The airline already has 73 of the planes, with an additional 152 on order, including the 70 firm orders announced, according to Boeing.
The next-generation 737s are more fuel efficient than earlier versions of the plane. Ryanair said this helps keep its operating costs low, undergirding its plans for further expansion.
The deal is a significant feather in Boeing's cap. The aerospace giant has lost some recent battles for low-cost airline business to archrival Airbus, a joint venture of European Aeronautic Defense & Space and BAE Systems.
The Ryanair order is the latest in a spate of recently announced deals with international carriers
Ryanair plans to serve more than 70 million travelers a year by 2012, making it Europe's biggest carrier, while reducing per- seat operating costs.
Passenger traffic accounted for by low-fare carriers will exceed 40 percent of scheduled traffic in the region by 2010, compared with 24 percent last year, according to the Brussels-based European Low Fares Airlines Association.
"This deal sends out the clearest possible signal of the growth opportunity that Ryanair believes still exists in the European market,'' said Stephen Furlong, an analyst at Davy Stockbrokers in Dublin.
"This is designed to make sure Ryanair is positioned for growth in the long term,'' Chairman David Bonderman said at the press conference.
Bonderman, 62, a founder of U.S. buyout firm Texas Pacific Group, owns about 7 million Ryanair shares, according to regulatory filings in 2003.
Ryanair chief, Michael O'Leary declined to provide the agreement's specific pricing of the planes, saying only that it was better than the company's last order. The new prices also apply to aircraft that have been ordered already but not delivered yet, he said.
"With the industry and travel coming back the most important thing is that Ryanair will now have the planes that they need," said Alan Mulally, head of Chicago-based Boeing's commercial aircraft business, at the press conference.
Airbus SAS overtook Boeing as the world's largest maker of commercial airliners in 2003 and widened its lead last year. Boeing lost orders to Airbus in 2004 from discount airlines Spirit Airlines Inc., Air Berlin GmbH and AirAsia Bhd.
By: N. Peter Kramer
