Ryanair 2010 Annual Report Download - page 186

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individual aircraft by applying a formula which reflects increases in the published U.S. Employment Cost and
Producer Price indices between the time the Basic Price was set and the period of six months prior to the
delivery of such aircraft.
Boeing has granted Ryanair certain price concessions with regard to the Boeing 737-800 “next
generation” aircraft. These take the form of credit memoranda to the Company for the amount of such
concessions, which the Company may apply toward the purchase of goods and services from Boeing or toward
certain payments, in respect of the purchase of the aircraft under the various Boeing contracts.
Boeing and CFMI (the manufacturer of the engines to be fitted on the purchased aircraft) have also
agreed to give the Company certain allowances in addition to providing other goods and services to the
Company on concessionary terms. These credit memoranda and allowances will effectively reduce the price of
each aircraft to the Company. As a result, the effective price of each aircraft will be significantly below the
Basic Price mentioned above. At March 31, 2010, the total potential commitment to acquire all 90 “firm”
aircraft, not taking such increases and decreases into account, will be up to U.S.$4.6 billion. (At March 31, 2009
the potential commitment was U.S.$6.8 billion to acquire 134 “firm” aircraft. At March 31, 2008 the potential
commitment was U.S.$7.0 billion to acquire 139 “firm” aircraft).
Operating leases
The Company financed 55 of the Boeing 737-800 aircraft delivered between December 2003 and
March 2010 under seven-year, sale-and-leaseback arrangements with a number of international leasing
companies, pursuant to which each lessor purchased an aircraft and leased it to Ryanair under an operating
lease. As a result, Ryanair operates, but does not own, these aircraft. Ryanair has no right or obligation to
acquire these aircraft at the end of the relevant lease terms. 15 of these leases are denominated in euro and
require Ryanair to make variable rental payments that are linked to EURIBOR. Through the use of interest rate
swaps, Ryanair has effectively converted the floating-rate rental payments due under 12 of these leases into
fixed-rate rental payments. Another 30 leases are also denominated in euro and require Ryanair to make fixed
rental payments over the term of the leases. 10 remaining operating leases are U.S. dollar-denominated, of
which two require Ryanair to make variable rental payments that are linked to U.S. dollar LIBOR, while the
remaining eight require Ryanair to make fixed rental payments. The Company has an option to extend the initial
period of seven years on 28 of the operating lease aircraft on pre-determined terms and has chosen not to extend
10 of these aircraft with leases maturing during January, February or March 2011. The following table sets out
the total future minimum payments of leasing 55 aircraft (2009: 43 aircraft; 2008: 35 aircraft), ignoring interest,
foreign currency and hedging arrangements, at March 31, 2010, 2009 and 2008, respectively:
At March 31,
2010 2009 2008
Minimum
payments
Present
value of
Minimum
payments
Minimum
payments
Present
value of
minimum
payments
Minimum
payments
Present
value of
minimum
payments
1M 1M 1M 1M 1M 1M
Due within one year
.................
77.8 71.5 85.8 78.8 78.2 71.9
Due between one and five
years................................
.........
208.8 160.3
177.8 134.9
234.8 180.4
Due after five years
..................
112.2 64.3 29.1 17.2 22.2 13.3
Total................................
.........
398.8 296.1
292.7
230.9 335.2 265.6