Ryanair Fleet Expansion.Ryanair to spend €4.5bn on 125 new Boeings
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Ryanair Fleet Expansion.Ryanair to spend €4.5bn on 125 new Boeings
Ryanair to spend €4.5bn on 125 new Boeings
(from Irish Independent 24.02.05)
LOW-COST airline Ryanair is expected to announce in London today that it has placed firm orders for 125 new Boeing 737-800 aircraft at a cost of $6bn (€4.5bn).
Ryanair chairman, the Texas-based businessman David Bonderman, and Ryanair boss Michael O'Leary are set to announce the massive order at a press conference in London.
The fast-expanding airline already has firm orders for 150 new aircraft from the Seattle-based Boeing company and has an option to order a further 125. Now the airline has decided to turn the option on the 125 aircraft into a firm order.
Mr O'Leary has decided to strike at a time when the dollar-euro exchange favours Euorpean businesses ordering in the US.
The aircraft work out at about $48m (€36.4m) each. Boeing 737-800s are considered attractive to low-cost airlines as they are single-aisle craft which suit short-haul services. Ryanair is currently in the process of taking delivery of 150 new Boeing 737-800s. Ironically, Ryanair is having difficulty persuading its existing pilots to train to fly the new aircraft.
Relations between the airline and the Irish Airline Pilots Association have been strained because of a Labour Court case taken by the union to improve the terms and conditions of Ryanair's pilots.
Stock broking analysts say Ryanair is expanding so fast that it needs a steady supply of planes.
(from Irish Independent 24.02.05)
LOW-COST airline Ryanair is expected to announce in London today that it has placed firm orders for 125 new Boeing 737-800 aircraft at a cost of $6bn (€4.5bn).
Ryanair chairman, the Texas-based businessman David Bonderman, and Ryanair boss Michael O'Leary are set to announce the massive order at a press conference in London.
The fast-expanding airline already has firm orders for 150 new aircraft from the Seattle-based Boeing company and has an option to order a further 125. Now the airline has decided to turn the option on the 125 aircraft into a firm order.
Mr O'Leary has decided to strike at a time when the dollar-euro exchange favours Euorpean businesses ordering in the US.
The aircraft work out at about $48m (€36.4m) each. Boeing 737-800s are considered attractive to low-cost airlines as they are single-aisle craft which suit short-haul services. Ryanair is currently in the process of taking delivery of 150 new Boeing 737-800s. Ironically, Ryanair is having difficulty persuading its existing pilots to train to fly the new aircraft.
Relations between the airline and the Irish Airline Pilots Association have been strained because of a Labour Court case taken by the union to improve the terms and conditions of Ryanair's pilots.
Stock broking analysts say Ryanair is expanding so fast that it needs a steady supply of planes.
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The order comprises of 70 firm aircraft valued at over $4 billion and 70 options. This agreement (which is subject to shareholder approval at an EGM) brings the total Ryanair/Boeing order book up to 225 firm aircraft and 193 options.
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Ironically, Ryanair is having difficulty persuading its existing pilots to train to fly the new aircraft.
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The remaining 200s (which have already been sold to a US company) are mainly based in Dublin. With approx 200 pilots in dispute about conversion to the 800.
800s are being slowly introduced to Dublin as 200s are withdrawn from service. So by years end there won't be any remaining 200s in RYRs fleet. What happens then, I can't see MOL paying a couple of hundresd pilots to just sit around!
800s are being slowly introduced to Dublin as 200s are withdrawn from service. So by years end there won't be any remaining 200s in RYRs fleet. What happens then, I can't see MOL paying a couple of hundresd pilots to just sit around!
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maxfli apparently not, the number of aircraft coming has been accelerated. There is a Boeing powerpoint presentation on the Ryanair site in the investor relations section which shows additional orders added to the previous ones. Page 11 and 12 show the difference and there appear to be extra orders in 07 08 and 09 as well as first orders for 10 11 and 12
Boeing Order on Ryanair website
Boeing Order on Ryanair website
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Interesting slide in amongst that lot showing the spread of bases when they get up to 48. If my interpretation of the location of the orange blobs is correct, then in the UK it would appear that they are thinking in terms of adding Cardiff, Edinburgh, Newcastle, East Midlands and Manchester as bases. Despite being local to MAN, and being a supporter of more routes, I wouldn't have thought that MAN would be prepared to jump through sufficient hoops to keep MOL onside.
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Jesus christ! As much as I admire MOL and Ryanair isn't this taking a bit of a gamble?
Where is the market going to be for all these new aircraft? Surely the airline market in the EU is nearly saturated?
With this order, Ryanair must be banking on a major european airline going bust (eg Alitalia), or they are aiming to run all their competitors into the ground.
However, whilst I can see many loco's failing, I can't see EasyJet falling in the future which is why I think its a bit of a risk.
Then again, they wouldn't place the order if they didn't know what they were doing, so its interesting times ahead!
Where is the market going to be for all these new aircraft? Surely the airline market in the EU is nearly saturated?
With this order, Ryanair must be banking on a major european airline going bust (eg Alitalia), or they are aiming to run all their competitors into the ground.
However, whilst I can see many loco's failing, I can't see EasyJet falling in the future which is why I think its a bit of a risk.
Then again, they wouldn't place the order if they didn't know what they were doing, so its interesting times ahead!
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Is it really a huge risk for MOL? He's a very astute businessman and even if the whole "gamble" (to use your word) did not pay off in 4 or 5 years time I wouldn't think his own personal wealth would take too big a hit
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Shotone, If you read my post at the bottom I did say that they know what they are doing. Just IMO (which is allowed) I reckon its a bit of a gamble, but they are better educated in how they do their job.
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Nikmanl - this still needs approval at the EGM, didn't state when & where this would be + not sure if this would be a formality anyway? The presentation also mentions the commercial logic of confirming this order now. Presumably there is also a certain amount of "news management" here with some of the other stick they've been taking recently, but then again, they always have had a slick PR machine!
The most interesting things is, as Curious pointed out, those possible new bases.
Again, not sure if any were specifically clarified, but unless anyone wants to scan in maps for precise co-ordinates:
Within the UK:
North: Near LPL - would that be more likely to be LBA than MAN - MOL was certainly enjoying some good MAN bashing last week, and I just can't see how it would really be their kind of airport (operationally) , even if they did "jump through hoops" to get FR there in the first place on the DUB run.
Midlands: Would DSA be more likely than EMA, once DSA to DUB has been established. Would Peel deal harder than MAG? No surprise not to see BHX on their plans, and presumably CVT's runway precludes it from becoming an -800 base, but could CVT-DUB be more attractive than BHX-DUB if a good deal on handling balanced out any possibility of LDY style reduced capacity???
Southwest - BRS looking more for "high yield" routes like EWR? BOH catchment not big enough for an FR base?
European bases not already served / not obvious:
Portugal - is that really LIS?
Spain - VLL - and is the one in the middle Don Quixote? In SW is that SVQ? Would they really base at AGP, or is there another Ryanairport option down there not yet opened?; MJV? NW - a bit too far right for SDR?
Italy - is that NAP to complement CIA?
France - looks like NCE in the bottom corner, but that must be one of the most un-Ryanairports in France (apart from CDG!). Or is it TLN?
Switzerland - is that GVA (poss loco terminal) and BSL?
Germany - almost looks like MUC down in the south - again that must be totally unFRiendly!
Poland - ??
Denmark - looks like CPH, but surely not - even EZ have pulled routes here!
Maybe I'm reading a little too much into this, maybe some of these are deliberately out to confuse / start discussions, but there appear to be several possible airports in this list which would not fit the Ryanair model.
An order of new planes of this magnitude is certainly significant, and it is a gamble which appears to have been well calculated.
Are they revealing a possible intention to start using some "major airports" for the first time beyond their existing ROI operations.
Could this be the real news?
The most interesting things is, as Curious pointed out, those possible new bases.
Again, not sure if any were specifically clarified, but unless anyone wants to scan in maps for precise co-ordinates:
Within the UK:
North: Near LPL - would that be more likely to be LBA than MAN - MOL was certainly enjoying some good MAN bashing last week, and I just can't see how it would really be their kind of airport (operationally) , even if they did "jump through hoops" to get FR there in the first place on the DUB run.
Midlands: Would DSA be more likely than EMA, once DSA to DUB has been established. Would Peel deal harder than MAG? No surprise not to see BHX on their plans, and presumably CVT's runway precludes it from becoming an -800 base, but could CVT-DUB be more attractive than BHX-DUB if a good deal on handling balanced out any possibility of LDY style reduced capacity???
Southwest - BRS looking more for "high yield" routes like EWR? BOH catchment not big enough for an FR base?
European bases not already served / not obvious:
Portugal - is that really LIS?
Spain - VLL - and is the one in the middle Don Quixote? In SW is that SVQ? Would they really base at AGP, or is there another Ryanairport option down there not yet opened?; MJV? NW - a bit too far right for SDR?
Italy - is that NAP to complement CIA?
France - looks like NCE in the bottom corner, but that must be one of the most un-Ryanairports in France (apart from CDG!). Or is it TLN?
Switzerland - is that GVA (poss loco terminal) and BSL?
Germany - almost looks like MUC down in the south - again that must be totally unFRiendly!
Poland - ??
Denmark - looks like CPH, but surely not - even EZ have pulled routes here!
Maybe I'm reading a little too much into this, maybe some of these are deliberately out to confuse / start discussions, but there appear to be several possible airports in this list which would not fit the Ryanair model.
An order of new planes of this magnitude is certainly significant, and it is a gamble which appears to have been well calculated.
Are they revealing a possible intention to start using some "major airports" for the first time beyond their existing ROI operations.
Could this be the real news?
Last edited by jabird; 25th Feb 2005 at 03:29.
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Regarding bases, Ryanair is also planning to base three additional aircraft at Liverpool and three additional aircraft at Luton, the Luton aircraft arriving from September this year.
Not sure about Liverpool, but Luton's difficulty is finding/creating sufficient parking for these aircraft particularly overnight but the Airport will almost certainly 'do the business' because the new owners of TBI want to see the business risk spread wider and less dependant on easyJet.
TBI (as was) at Cardiff is also rumoured to be talking with Ryanair.
Returning to Ryaniar's Luton operation the airline's new routes are running at average load factors of 95% with the exception of Stockholm/ Vasteras which is only achieving an average of 75%.
However, Ryanair is relaxed about this latter load factor pointing out that this is being achieved in the depths of the winter season.
This additional order may be a 'gamble' but MoL and Ryanair rarely get it wrong - perhaps the bigger gamble is whether after the May UK election when Blair et al get back in and then Brown raises income tax and UK interest rates go up, if the UK punters then reign in their spending.
Then there are the continuing economic problems in Germany...
Regarding bases, Ryanair is also planning to base three additional aircraft at Liverpool and three additional aircraft at Luton, the Luton aircraft arriving from September this year.
Not sure about Liverpool, but Luton's difficulty is finding/creating sufficient parking for these aircraft particularly overnight but the Airport will almost certainly 'do the business' because the new owners of TBI want to see the business risk spread wider and less dependant on easyJet.
TBI (as was) at Cardiff is also rumoured to be talking with Ryanair.
Returning to Ryaniar's Luton operation the airline's new routes are running at average load factors of 95% with the exception of Stockholm/ Vasteras which is only achieving an average of 75%.
However, Ryanair is relaxed about this latter load factor pointing out that this is being achieved in the depths of the winter season.
This additional order may be a 'gamble' but MoL and Ryanair rarely get it wrong - perhaps the bigger gamble is whether after the May UK election when Blair et al get back in and then Brown raises income tax and UK interest rates go up, if the UK punters then reign in their spending.
Then there are the continuing economic problems in Germany...
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Not sure about Liverpool, but Luton's difficulty is finding/creating sufficient parking for these aircraft particularly overnight
They are also looking at extending the main apron west and even building a new apron on the south side of the runway (between the runway and the river).
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FR could certainly base 3 or 4 800's at BOH as long as they flew to Spain, Italy and Southern France. The GRO route is doing well for about 10 months of the year selling seats at the mid to high range of FR's price structure (can pick up a real bargain Jan-Feb).
Doing this would also free up aircraft at PIK, DUB and GRO allowing new routes there.
Murcia, Almeria, Rome, Venice and Bergerac would work well.
Sadly, I think FR will be looking at basing on mainland europe rather than BOH. Hopefully we will pick up a route here or there over the next few years.
Doing this would also free up aircraft at PIK, DUB and GRO allowing new routes there.
Murcia, Almeria, Rome, Venice and Bergerac would work well.
Sadly, I think FR will be looking at basing on mainland europe rather than BOH. Hopefully we will pick up a route here or there over the next few years.
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No room in a saturated market
Enough of this ill-considered rubbish about it being a risky move for Ryanair. This is reminiscent of those that doubted the profitability of low cost operations. Ryanair and Easyjet were once fledglings in an established airline world. Look then, look now and look ahead.
Surely this is the big move by Ryanair to commence the MOL promised bloodbath among European low cost operators. Ryanair are stating their intentions very clearly: to dominate the market that they had a big hand in creating. Their plan is an increase in scale and this doesn't mean adding capacity to a "saturated market". What it does mean is pushing out the little operators that are making money in their own regional niches at the moment - i.e. their revenue is there for the taking by anyone with sufficient strength to back up the aggression.
I'm not pro MOL and Ryanair, in fact I work for an opposition carrier that is set to take a hammering. The promise of a 225 aircraft fleet should be the loudest of warnings to BMIbaby, Jet2, Flybe, Thomsonfly and Hapag Lloyd Express amongst many others. Sooner or later, even the largest among them, will not have the resources to fight a war - and that's what it's going to be.
Business has no sentimentality.
Surely this is the big move by Ryanair to commence the MOL promised bloodbath among European low cost operators. Ryanair are stating their intentions very clearly: to dominate the market that they had a big hand in creating. Their plan is an increase in scale and this doesn't mean adding capacity to a "saturated market". What it does mean is pushing out the little operators that are making money in their own regional niches at the moment - i.e. their revenue is there for the taking by anyone with sufficient strength to back up the aggression.
I'm not pro MOL and Ryanair, in fact I work for an opposition carrier that is set to take a hammering. The promise of a 225 aircraft fleet should be the loudest of warnings to BMIbaby, Jet2, Flybe, Thomsonfly and Hapag Lloyd Express amongst many others. Sooner or later, even the largest among them, will not have the resources to fight a war - and that's what it's going to be.
Business has no sentimentality.
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There have been constant rumours since Ryanair began their operations at Nottingham East Midlands Airport that the airport was set to become a Ryanair base, and certainly, an established no-frills airline that has ambitious expansion plans would be very benefitial to NEMA, as EasyJet & bmibaby really don't seem to know what they want from NEMA. So far the only routes that have been launched are aircraft from existing bases flying into NEMA, and apparently 2 more routes will be added this year not sure where to, but it won't be any based aircraft I'm sure.
With regards to Portugal; I find it very unlikely Ryanair will expand here. Airport charges are very high in Portugal, and there are very few secondary airports in the country. Lisbon has had such high charges its been a LCC blackspot, and Faro is served by airlines because they know they can get the market from the holiday operators. I know Porto is always trying to get more people to visit the region, so I was waiting for a LCC to start this route.
With regards to Portugal; I find it very unlikely Ryanair will expand here. Airport charges are very high in Portugal, and there are very few secondary airports in the country. Lisbon has had such high charges its been a LCC blackspot, and Faro is served by airlines because they know they can get the market from the holiday operators. I know Porto is always trying to get more people to visit the region, so I was waiting for a LCC to start this route.
