Ryanair 2005 Annual Report Download - page 69

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28 COMMITMENTS AND CONTINGENCIES (Continued)
(a ) Commitments (Continued)
The “Basic Price” (equivalent to a standard list price for an aircraft of this type) will be increased by (a) an estimated
US$900,000 per aircraft for certain “buyer furnished” equipment the company has asked Boeing to purchase and install on each
of the aircraft, and (b) an “Escalation Factor” designed to increase the Basic Price of any individual aircraft by applying a
formula which reflects increases in the published US 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 group 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 group
certain allowances in addition to providing other goods and 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. At 31 March 2005, the total potential commitment to
acquire all 147 ”firm” aircraft, not taking such increases and decreases into account, will be up to US$7.5 billion.
(b) Operating leases Aircraft
000
Due within one year 34,753
Due between one and two years 34,753
Due between two and five years 104,260
Due after five years 34,128
Total 207,894
The above table sets out the committed future cost of leasing 13 Boeing 737-800 “next generation” at March 31, 2005.
(c) Commitments resulting from the use of derivative financial instruments by the group are described in notes 15 to 18.
(Continued)
Notes 59
ANNUAL REPORT & FINANCIAL STATEMENTS 2005
2002 Contract 36
67 103 50.885
2003 Contract 14
10 24 50.889
2005 Contract - 70 70
50.916
50 147 197
Aircraft
Delivered at
31 March, 2005
Firm Aircraft
Deliveries Fiscal
2006 - 2012
Total
“Firm”
Aircraft
Basic
price per
aircraft
US$’m