Ryanair 2004 Annual Report Download - page 59

28 COMMITMENTS AND CONTINGENCIES (Continued)
(a ) Commitments (Continued)
aircraft under the 2002 Boeing Contract. Boeing and CFMI (the manufacturer of the engines to be fitted on the purchased
aircraft) have also agreed to give the group certain allowances in addition to providing other goodsand services to the group
on concessionary terms. These credit memoranda and allowances will effectively reduce the price of each aircraft to the group.
As a result, the effective price of each aircraft will be significantly below the Basic Price mentioned above. The total potential
commitment to acquire all 155 aircraft, not taking such increases and decreases into account, will be up to US$7.6 billion.
On January 31, 2003 the company entered into a contract with Boeing (the “2003 Boeing contract”) for the delivery of an
additional 22 new Boeing 737-800 “next generation” aircraft, bringing its total firm orders (including options exercised at that
date) to 125 aircraft. In addition the company increased its purchase options to 125. The same commercial terms apply to the
additional firm aircraft ordered and to the additional options granted. At March 31, 2004, 102 firm aircraft and 2 options
exercised remaindue for delivery.
(b) Operatingleases Aircraft
000
Duewithin one year 37,055
Duebetweenone and two years 37,055
Duebetween two and five years 91,155
Dueafter five years 50,342
Total 215,607
Theabove table sets outthe committedfuture cost of leasing10 Boeing 737-800 “next generation” and 6 Boeing 737-300’s at
March 31, 2004.
As part of the ”Buzz” acquisition 6 Boeing 737-300’s which were leased by KLM UK Ltd from International Lease Finance
Corporation “ILFC” were novated to Buzz Stansted Limited, a subsidiary of Ryanair Limited. Subsequent to the year end Buzz
Stansted Limitedenteredintoanagreement withILFC to returnthe 6 Boeing 737-300’s betweenOctober15, 2004 andOctober
31, 2004 withno early termination penalty.
(c) Co m m i t m e n ts resulting from the use of deriva t i ve financial inst r u m e n ts by the group are desc r i bed in notes 15 to 18.
Co n t i n g e n c i e s
(d) The group is engaged in litigation arising in the ord i n a ry co u rse of its business. Management does not believe that any such
litigation will individually or in aggre g a t e have a material adve rse effect on the financial condition of the gro u p. Should the gro u p
be unsuccessful in these litigation actions, management believes the possible liabilities then arising ca n n ot be determined but are
n o t ex p e c t ed to materially adve rsely affect the gro u p’s res u l ts of operations or financial pos i t i o n .
(e) The co m p a ny has provided 56 . 5m in lette rs of guara n tee to se cu re obligations of subs i d i a ry undertakings in respect of loans and
bank adva n ces.
(f) In order to avail of the exe m ption co n t ained in Section 17 of the Co m p a n i es (A m e n d m e n t) Ac t, 1986, the holding co m p a ny, Rya n a i r
Holdings plc, has guara n teed the liabilities of its subs i d i a ry undertakings re g i ste red in Ireland. As a res u l t, the subs i d i a ry
u n d e rtakings have been exe m pted from the provisions of Section 7 of the Co m p a n i es (A m e n d m e n t) Ac t, 1986. Details of the gro u p’s
principal subs i d i a r i es have been included at note 31. The Irish subs i d i a r i es of the group cove red by the Section 17 exe m ption are
l i s ted at note 31 a l so. One additional Irish subs i d i a ry cove r ed by this exe m ption which is not listed as a principal subs i d i a ry at note
31 is Airport Marketing Se rv i ces Limite d .
(Continued)
Notes 59
A N N U A L R E P O RT & F I N A N C I A L S T A T E M E N T S 2 0 0 4