Ryanair 2008 Annual Report Download - page 86

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86
In February 2005, the Group entered into a contract with Boeing (the “2005 Boeing contract”) whereby
the Group agreed to purchase 70 new Boeing 737-800 “next generation” aircraft and acquired additional
purchase rights to acquire a further 70 such aircraft over a 5 year period from 2006 to 2011. The aircraft to
be delivered after January 1, 2005, arising from the 2002 and 2003 Boeing contracts, benefit from the
discounts and concessions under the 2005 Boeing contract. In addition, the orders for the 89 “firm” aircraft
still to be delivered at January 1, 2005 and the remaining additional purchase rights in respect of 123 aircraft
granted under the 2002 and 2003 Boeing contracts are governed by the 2005 Boeing contract from January
2005.
In June 2006 the Group exercised 10 options under the 2005 contract whereby it will increase its firm
aircraft deliveries by this amount during fiscal 2008 (3) and 2009 (7).
In August 2006 the Group exercised 32 options under the 2005 contract whereby it will increase its
“firm” aircraft deliveries by this amount during fiscal 2009 (22) and 2010 (10).
In April 2007 the Group exercised 27 options under the 2005 contract whereby it will increase “firm”
aircraft deliveries during fiscal 2010.
In June 2008, the Group exercised 3 options with Boeing under the terms of its 2005 contract. These
firm Boeing 737-800 aircraft will be delivered in fiscal 2011.
The table below details the firm aircraft delivery schedule at March 31, 2008 and March 31, 2007 for
the Group respectively pursuant to the 2002 and 2005 Boeing contracts.
Aircraft
Delivered at
March 31,
2008
Firm Aircraft
Deliveries
Fiscal 2009-2012
Total “Firm”
Aircraft
Basic price
per aircraft
(U.S.$’m)
Firm Aircraft
Deliveries
Fiscal 2008-
2012 at
March 31,
2007
2002 Contract
...................
100 3 103 50.885 23
2005 Contract
...................
17 136 153 50.916 125
Total................................
..
117 139 256 148
The remaining 46 aircraft on hand at March 31, 2008 giving a total fleet of 163 aircraft – 128 owned and 35 leased – were delivered under
previous contractual arrangements.
The “Basic Price” (equivalent to a standard list price for an aircraft of this type) for each aircraft
governed by the 2005 Boeing contract will be increased by (a) an estimated U.S.$900,000 per aircraft for
certain “buyer furnished” equipment the Group 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 U.S. Employment Cost and Producer Price
indices between the time the Basic Price was set and the period of 6 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.