Huge order for Boeing

Herald Staff and Associated Press

LONDON — Ryanair, the Irish-based budget carrier, will buy 100 Boeing 737-800 aircraft in the next eight years, and has taken options on 50 more planes, the airline and the manufacturer announced Thursday.

Boeing also landed a much smaller order Thursday from American Trans Air for two 757-300s.

Terms of the Ryanair deal were not announced. Ryanair said the catalog value of the deal was $9.1 billion, but Boeing’s offer was "exceptionally competitive."

Last year, Ryanair canceled options for 737s priced at $40 million each, calling the price too high. The planes have a list price of about $61 million each.

Anfter canceling the options, the airline placed ads in trade publications seeking offers for up to 50 used 737s.

Discounts are standard, Boeing Chairman Phil Condit acknowledged in a conference call with reporters Wednesday. And with discount airlines being among the few to make money following Sept. 11, they will be important customers during the coming year, he said.

Boeing is reported to be in talks with Ryanair competitor EasyJet, which is looking to buy 75 single-aisle planes.

For Boeing, the Ryanair announcement is "extremely important in terms of momentum," said Daniel Solon, an analyst with Avmark International. "We’re talking about roughly one airplane a month."

It is the largest single order for 737s, the company said, and one of the six largest orders ever for Boeing.

The airline’s chief executive, Michael O’Leary, said the deal "will allow Ryanair and Boeing to revolutionize short-haul travel all over Europe in the same way that Southwest and Boeing have in the United States."

He said the expansion would create more than 3,000 jobs at Ryanair and make the carrier Europe’s largest scheduled airline in passenger numbers by 2010.

"Ryanair is going to be a monster in Europe in the next 10 years," O’Leary said.

The airline has grown rapidly through a formula of no-frills short-haul service to secondary European airports, similar to what Southwest Airlines has done in the United States. It also has focused heavily on Internet sales, selling 90 percent of its tickets online.

Ryanair, which serves 12 countries on 64 routes, will operate a fleet of 44 Renton-built 737s this summer. The new planes will replace the carrier’s existing 737-200 fleet and expand its capacity toward a target of 40 million passengers per year.

Toby Bright, Boeing’s newly appointed executive vice president for commercial jet sales, said the deal improved the outlook of "a difficult year for us."

"This a validation of the 737 as the aircraft of choice for low-fare airlines," he added.

Elsewhere Thursday, American Trans Air agreed to lease two new 757-300 jets from Boeing Capital Corp. The planes will be delivered in 2003.

The two planes have a combined list price of $166 million.

American Trans Air had taken an option on up to 10 757s in May 2000, when it placed firm orders for 39 737s and 10 757s. Thursday’s order marks the first options to be exercised under the deal.

American Trans Air was the North American launch customer for the 757-300, which is Boeing’s largest single-aisle plane. The airline configures it to carry 247 passengers.

You can call Herald Writer Bryan Corliss at 425-339-3454

or send e-mail to corliss@heraldnet.com.