Ryanair signs landmark deal with Boeing

RYANAIR announced a $15.6bn (£10.3bn) order for 175 passenger jets from Boeing yesterday in a boost to the struggling plane manufacturer that should help the Irish airline consolidate its position as Europe’s dominant low-cost carrier.

The order for the current generation 737NGs keeps Ryanair as one of the few remaining all-Boeing airlines, after Lion Air of Indonesia earlier this week dealt it a blow by switching to rival Airbus in a $24bn mega-order.

The deal, signed in New York yesterday, will see Ryanair increase its fleet to 400 planes from 300 at present, as old planes are retired. Capacity will grow by 25 per cent to 100m passengers per year by 2018, Ryanair said.

CEO Michael O’Leary declined to say how much of a discount he secured for the order, but said Boeing’s struggles with the 787 had created an opportunity for both sides.

“Hopefully it will help refocus people’s minds on the fact that Boeing continues to deliver great aircraft and is growing strongly, rather than a minor issue on the 787,” he said.

The industry benchmark 737-800 model is worth $89.1m at list prices, but large orders attract steep discounts and industry appraisers value the plane closer to $40m.

The order for 737s delivers a timely boost to Boeing, which last week won US approval for test flights for its new 787 Dreamliner, which has been grounded for two months after batteries burned on two of the super jets in January.

The Federal Aviation Administration last week approved Boeing’s plan for testing a revamped battery system for the plane.

Boeing predicted the plane would be back in service in weeks, not months, but its biggest 787 customer, All Nippon Airways, said that prediction was too uncertain for it to base its planning on.