TOM GILL / LONDON
Airline has ambitions to grow to Europe's largest short-haul carrier by 2010
Ryanair has placed a record order for 100 Boeing 737-800 aircraft and 50 options in a bid to jump from seventh position to the region's largest short-haul airline by 2010.
The list price for the orders and options was $9.1 billion, but after intense negotiations the airline received a "significant" discount, says chief executive Michael O'Leary. The new aircraft are in addition to 28 737-800s already delivered or on order. Deliveries start from December this year, running until 2010.
"We are looking at the single largest firm order of Next Generation 737s ever," says Tobias Bright, executive vice-president sales at Boeing Commercial Aircraft. Ryanair says it chose the 189-seater 737-800s over the Airbus A320 or the Boeing 737-700 because of the additional seats and lower operating costs.
The new aircraft will replace its 21-strong fleet of 737-200Advs. These will be phased out between 2003 and 2007, says O'Leary. The decision to go for new aircraft marks a shift for the airline. Last August, frustrated at being unable to get Boeing to lower its prices, it advertised for up to 50 used aircraft. The purchase "probably" means the end of the airline's use of secondhand aircraft, says chief financial officer Michael Cawley, unless there are "exceptional opportunities" that overcome the advantages of the new aircraft's lower operating and maintenance costs. The airline will carry out the line maintenance for the737-800s itself, although for heavier maintenance it is talking to several bidders.
The new aircraft, financed 15% from its own cash-rich balance sheet, will allow Ryanair to grow by 25% a year until 2010 when it will carry 40 million passengers compared with 10 million anticipated by the end of March this year, estimates O'Leary. If options are included, it will be able to carry 55 million passengers annually.
Ryanair will unveil six new routes at the end of January out of the UK and its European bases. Its Belgian hub at Charleroi is likely to see at least a couple of new routes. These will come on top of the previously announced opening of its Frankfurt-Hahn base on 14 February, which will serve 10 routes to France, Ireland, Italy, Norway and the UK. Talks are continuing with another 40 airports.
O'Leary denied that Ryanair was looking to expand at London Gatwick, where it is understood to have applied for additional slots, along with UK no-frills rival Go. EasyJet unveiled a major expansion at Gatwick in December. "Even if Gatwick, [London] Heathrow or Frankfurt-Main came to us, we wouldn't go there," claims O'Leary, pointing to slow turnaround times and high airport charges.
O'Leary maintains that Ryanair continues to offer the cheapest tickets in the European no-frills sector, claiming an average fare of £36 ($51) in 2000 against £48 for Easyjet and £57 for Go. Its average ticket price stood at £36 last year and will fall to as low as £32 this year, he says.
Source: Flight International
