Boeing Said to Win Ryanair Order Valued at $15.1 Billion

Boeing Co. won a jet order from Ryanair Holdings Plc valued at $15.1 billion at list price, selling 170 of its 737 model as that plane is phased out in favor of the Max version, people familiar with the matter said.

The deal between Boeing and Dublin-based Ryanair may be announced as soon as next week, said the people, who asked not to be identified because the talks aren’t public. Airlines typically buy at a discount to the catalog price, which is $89.1 million for the 737-800, now the top seller in Boeing’s lineup.

Winning an order for the current 737 variant, known as the NG, is a boost for Chicago-based Boeing because airlines are shifting their sights to the Max and its more-efficient engines. Boeing is preparing to introduce the 737 Max in 2017 to compete with Airbus SAS’s upgraded A320neo.

“We’ve had the strategy of getting Max customers to also commit to NGs, and that’s paid off,” Boeing’s marketing chief, Randy Tinseth, said in an interview at the International Society of Transport Aircraft Traders conference in Orlando, Florida. He declined to comment on the Ryanair order.

Robin Kiely, a Ryanair spokesman, said the airline “does not comment upon, or engage in, rumor or speculation.” The Irish Independent newspaper reported yesterday that Ryanair had placed a Boeing order for as many as 200 planes in a deal to be signed next week.

Shares Rise

Boeing rose 1.5 percent to $84.16, the highest since May 2008, at yesterday’s close in New York. The shares have gained 12 percent this year, topping the 8.9 percent advance for the Standard & Poor’s 500 Index even while the planemaker works to end the grounding of its wide-body 787 Dreamliner.

Ryanair’s order, its largest, also ensures the airline will remain an all-Boeing operator, though the choice of the NG over the Max reflects Chief Executive Officer Michael O’Leary’s skepticism of the new plane. O’Leary has questioned the capacity of the Max, as well as its efficiency and waste-handling costs.

The Irish airline was delaying a jet order while pursuing a 694 million-euro ($909 million) bid for Aer Lingus Group Plc, an acquisition that European competition authorities blocked for a second time last month. The Boeing order positions Europe’s biggest discount carrier to meet a target to carry 120 million passengers over 10 years, up from 79.9 million in 2012.

Ryanair was considering Airbus A320neos and said it was working with Commercial Aircraft Corp. of China on the C919, a new entrant to the single-aisle market. Another option on the table, according to O’Leary, was to pick up jet orders from rivals struggling to fund purchases.

(Source: Bloomberg)