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Ryanair close to USD10bn Boeing deal

Friday, September 05 14:06:55

Ryanair is in advanced talks to buy around 100 of a high-density version of Boeing's 737 MAX jetliner in a potential $10 billion deal that could be finalised within weeks, two people familiar with the matter said.

The move comes two months after Boeing said it was studying plans to offer more seating in its upcoming 737 MAX by introducing a modified version with 200 seats, 11 more than the current maximum.

A deal for about 100 of those aircaft could be reached as early as the middle of September, one of the people said, asking not to be identified because the talks are confidential.

"Ryanair does not comment upon, or engage in, rumour or speculation," a spokesman for the airline said.

A European spokesman for Boeing Co declined to comment.

Coming months after Ryanair expanded a previous order for the existing 737 to 180 aircraft, a new order Europe's biggest no-frills carrier would mark a new phase in efforts by Boeing and European rival Airbus to appeal to ultra-low cost carriers.

Both manufacturers are adding seats to drive down the operating costs per seat, the key driver of aircraft economics.

In June, Airbus said it would increase the maximum number of seats on its revamped A320neo to 189, matching the capacity limit on the main variant of Boeing 737 MAX and providing fuel savings of 3.5 percent per seat.

Weeks later, Boeing leapfrogged its European rival by announcing plans to offer a 200-seat version of the 737-8 MAX, which Boeing Commercial Airplanes Chief Executive Ray Conner said would offer unspecified cost savings of 5 percent per seat.

One industry source said Ryanair was expected to place a large order for the modified version of 737-8 MAX and that this could happen "soon".

Ryanair uses solely Boeing aircraft but has so far held back joining a wave of orders for the next generation of fuel-saving 737 MAX aircraft with newer engines, saying it wants more seats.

In July, Chief Executive Michael O'Leary welcomed the decision to study a higher-density version and said he would maintain the existing order for 180 aircraft.

"We will take those aircraft as is, but for the next round of aircraft, (for the period) 2019 to 2025, we are looking at the 189-seat Airbus or what I hope will be a 197- to 198-seat 737," he was quoted as saying by Flightglobal.

(Reuters)

For more visit: www.businessworld.ie