Friday, April 25, 2014
The Associated Press
DUBLIN — There's finally some good news for Boeing: European discount airline Ryanair announced Tuesday it will buy 175 of the company's popular 737 jets, the largest order ever placed by a European carrier.
Michael O'Leary, left, CEO of Ryanair, and Ray Conner, president and CEO of Boeing, hold a news conference Tuesday in New York. Ryanair says it is buying 175 Boeing 737-800 aircraft, the biggest-ever order of Boeings by a European airline.
The Associated Press
Chicago-based Boeing Co. has struggled ever since its new 787 Dreamliner was grounded by regulators in January following problems with its electrical system. It also was dealt a blow 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.
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 billion. Ryanair received a 53 percent discount on a prior 737 order. This time, O'Leary said he was paying "slightly higher" prices.
"I'm paying higher prices, I'm just not allowed to say so," O'Leary said, joking that Boeing executives got him drunk on St. Patrick's Day.
He said Ryanair will cease dividends and share buybacks for the next two to three years to help pay for the jets.
The deal was timed to coincide with Tuesday's visit by Irish Prime Minister Enda Kenny to Washington to meet President Obama and senior American legislators for St. Patrick's Day-related events. Kenny plans to visit the Seattle area, the base for Boeing manufacturing, later this week.
Kenny, appearing alongside Obama, called the Boeing-Ryanair deal a contract "of extraordinary proportions" and a sign of Ryanair's stunning run of success.
Ryanair already operates a fleet of 305 Boeing 737-800 aircraft, each with 189 seats, one of the tightest configurations in the industry. It is Boeing's biggest European customer for the model, which launched in 1997 and faces global competition from the Airbus A320.
Boeing's primary 737 assembly line in Renton, Wash., faces a transition to building a newer model called the 737 MAX by 2017. Ryanair's order represents about a half-year of full-time work for the plant.
Ryanair has yet to sign on for the new MAX jet, but O'Leary said he has assembled a team to evaluate the new version of the 737.