Ryanair orders 100 Boeing 737 planes for $11 bn

New York: Irish budget airline Ryanair agreed to buy 100 aircraft from Boeing for $11 billion, with an option to purchase another 100 planes from the aerospace giant, the companies announced Monday.

The order, potentially worth up to $22 billion, unveiled the 737 Boeing MAX 200, a new version of Boeing`s popular, fuel-efficient 737 model. 

The latest design will accommodate up to 200 seats, up from the 160 in other single-aisle planes and more than other Boeing models, Boeing said.

Ryanair said the giant order will enable it to meet its growth targets, which calls for it to expand from 82 million customers in 2014 to more than 150 million in 2024, which marks the end of the delivery stream of the planes under Monday`s order.

The first planes will be delivered in 2019.

"It`s going to change the game for low-fare air travel," Ryanair chief executive Michael O`Leary said at a news conference. "It`s also going to change the game in Europe."

O`Leary said Ryanair plans to use the jets to enter new markets in Europe and challenge incumbent carriers.

"I hope it will hasten a new era of price wars in Europe over the next 10 years," he said.

Ryanair plans to seat 197 customers in the 737 Boeing MAX 200, eight more seats than the biggest single-aisle planes in its fleet. The extra seats will net $1 million more in annual revenues per plane in addition to savings from lower fuel costs, O`Leary said.

"The economics are compelling," he said.

The space for the additional seats comes from removing galley space in the front and rear of the plane. The companies said customers will gain leg room, an increasing flashpoint for customers who have complained of uncomfortable seating.

Ray Conner, chief of Boeing`s commercial airplanes division, said the model unveiled Monday holds appeal for other low-cost carriers. Low-cost carriers are forecast to account for 35 percent of demand for single-aisle planes by 20133, Boeing said.

"It`s a big deal for our operators and in particular it`s a big deal for our low-cost operators," Conner said. 

Boeing in July raised its 2014 profit forecast after second-quarter earnings jumped 52 percent to $1.65 billion on the strength of a 7.1 percent increase in commercial aircraft deliveries.

In midday trade, Boeing shares gained 2.5 percent to $127.84, while Ryanair fell 0.8 percent to $57.22.