ANALYSIS: Ryanair 737 pact ends long wait for renewal

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Ryanair's extensive deal for 175 Boeing 737-800s follows a long period of brinkmanship from the Irish carrier as it sought to extract another favourable agreement from the US airframer.

It has ordered nearly 350 aircraft from Boeing over the past 15 years, creating a mutually-beneficial arrangement in which Ryanair benefits from fleet commonality and the airframer retains a solid 737 customer in Airbus's back yard.

But Ryanair's size has made it far less dependent on a single-type fleet, and it has pressured Boeing by exploring alternatives - looking at defecting to Airbus and even claiming interest in the Comac C919, perhaps in a bid to overcome the impasse in negotiations by raising the prospect, however unlikely, of giving the Chinese an early market position in Europe.

Ryanair has talked with Airbus, but hinted at its preference for Boeing in 2009 when it walked away from discussions with the US airframer - blaming its unwillingness to carry over previous contractual terms into a new order - but opting not to re-enter talks with others.

In justifying its selection of the 737-800 the airline has previously cited "competitive" offers from Boeing, along with the higher seat count - and lower per-seat operating cost - compared with the Airbus A320 and 737-700.

Ryanair placed its first deal for the type in 1998, ordering 25, but only firmed three of the 20 options, letting the remainder lapse in 2002 as it supplemented the agreement - in the midst of the post-September 2001 slump - with an order for 100 more.

It added another 22 737s the following year and, through conversions and taking additional rights, effectively revised the 2002 order to 125 firm and 125 optioned aircraft. At the time all the options were due for delivery before the end of 2011.

Two of those options were firmed before Ryanair's last major agreement with Boeing, in 2005, covered another 70 firm jets and 70 options, and included carrying over concessions from the previous agreements onto 89 outstanding aircraft. This deal also extended the delivery timeline to 2014.

The upshot is that Ryanair has been able to reach into a deep well of 193 options, enabling it to firm 123 additional aircraft between 2005 and 2009.

While frustrated by discussions with airframers, the airline has been less aggressive in its expansion and appeared reluctant to rush into an order, even suggesting that the single-aisle backlog is oversold and could work in its favour.

Ryanair had placed a total of 348 orders for 737-800s before its latest preliminary pact for 175, and the carrier operates a fleet of 305 of the type. Around 100 of the additional jets will be used for growth, pushing the fleet over the 400 mark by 2018.

Chief executive Michael O'Leary says the 737-800 has been the "cornerstone" of the carrier's success, describing the aircraft as having "great engineering and phenomenal reliability". He says the order will enable the airline to expand at 5% annually for the next few years and reach 100 million passengers in March 2019.

The agreement will take up some of the end-of-line slots for the 737-800 as Boeing begins its transition to the re-engined 737 Max.

Ryanair has not included the Max in its latest order but says it is still evaluating the type, which is due to enter service in 2017.