February 17, 2011
By Staff Reporter
The two companies last week announced a deal, which sees Ryanair commit to the purchase of 70 aircraft immediately. The airline also has the option to buy another 70 planes, which are due for delivery between 2008 and 2012.
In theory, the deal would be worth $4.6 billion for the first 70 aircraft and $9.2 billion if Ryanair availed of its options. However, most industry analysts believe the Irish airline has received what is essentially a “bulk purchase” discount on the list price of the aircraft. This arrangement could reduce the cost to Ryanair by up to 50 percent.
The new aircraft will give Ryanair the potential to meet its target of carrying 70 million passengers annually by 2012. The airline currently carries about half that number.
Ryanair chief executive Michael O’Leary trumpeted the deal, suggesting that it would enable the company to cut its per passenger costs in half. The new aircrafts’ greater fuel efficiency will also mean savings of around