Ryanair 2010 Annual Report Download - page 63

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Beginning in June 2005, the Company exercised a number of purchase options to acquire new Boeing 737-800
aircraft. These exercised purchase options are detailed in the table below.
Date(s) Purchase Option Exercised No. of Aircraft Delivery Dates Agreed Upon
June 2005................................................. 5 Feb. 2007 to May 2007
October 2005........................................... 9 Sept. 2007 to Nov. 2007
June 2006................................................. 10 March 2008 to June 2009
August 2006 ............................................ 32 Sept. 2009 to June 2009
April 2007................................................ 27 Sept. 2009 to March 2010
June 2008, September 2008, October
2008 and January 2009............................ 30 June 2010 to March 2011
December 2009........................................ 10 Sept. 2012 to Nov. 2012
Ryanair expects to take delivery of an additional 72 aircraft under its contracts with Boeing over the
period from June 30, 2010 to March 31, 2013. These deliveries will increase the size of Ryanair’s fleet to 299 by
March 2013 (assuming that the planned disposal or return (under the terms of an operating lease) of 23 such
aircraft is completed on schedule). As of June 30, 2010, Ryanair had sold 25 Boeing 737-800 aircraft to third
parties. Depending on market conditions and various other considerations, Ryanair expects to either dispose of
23 more aircraft or return such aircraft to the relevant lessor during the period through March 31, 2013. (The
foregoing does not take into account an aircraft involved in a bird strike at Rome (Ciampino) airport in
November 2008, which has been retained but not repaired and is thus listed as a disposal in the table on page 92,
bringing the total number of past and future disposals and/or returns to 49.)
For additional details on the Boeing contracts, scheduled aircraft deliveries and related expenditures
and their financing, as well as the terms of the arrangements under which Ryanair currently leases 55 of the
aircraft in its operating fleet, see “Item 5. Operating and Financial Review and Prospects—Liquidity and Capital
Resources.”
Management believes that the purchase of the additional new Boeing 737-800 aircraft will allow
Ryanair to continue to grow over the next three years. Management also believes that the significant size of its
orders allowed Ryanair to obtain favorable purchase terms, guaranteed deliveries, and a standard configuration
for all of the aircraft it purchased.
The Boeing 737 is the world’s most widely used commercial aircraft and exists in a number of
generations, the Boeing 737-800s being the most recent. Management believes that spare parts and cockpit
crews qualified to fly these aircraft are likely to be more widely available on favorable terms than similar
resources for other types of aircraft. Management believes that its strategy of having reduced its fleet to one
aircraft type enables Ryanair to limit the costs associated with personnel training, the purchase and storage of
spare parts, and maintenance. Furthermore this strategy affords Ryanair greater flexibility in the scheduling of
crews and equipment. The Boeing 737-800s are fitted with CFM 56-7B engines and have advanced CAT III
Autoland capability, advanced traffic collision avoidance systems, and enhanced ground-proximity warning
systems.
At March 31, 2010, the average aircraft age of the Company’s Boeing 737-800 fleet was 2.94 years,
and no aircraft was more than 8 years old.
Training and Regulatory Compliance
Ryanair currently owns and operates four Boeing 737-800 full flight simulators for pilot training, the
first of which was delivered in 2002. The simulators were purchased from CAE Electronics Ltd. of Quebec,
Canada (“CAE”). The second simulator was delivered in 2004, while the third and fourth simulators were
delivered in the 2008 fiscal year. In September 2006, Ryanair entered into a new contract with CAE to purchase
B737NG Level B flight simulators. The first two of these simulators were delivered in the 2009 fiscal year and
are now fully operational. This contract also provides Ryanair with an option to purchase another five such
simulators. The gross price of each simulator is approximately $8 million, not taking into account certain price
concessions provided by the seller in the form of credit memoranda and discounts.
Management believes that Ryanair is currently in compliance with all applicable regulations and EU
directives concerning its fleet of Boeing 737-800 aircraft and will comply with any regulations or EU directives