Ryanair 2011 Annual Report Download - page 61

59
AIRCRAFT
Aircraft
As of June 30, 2011, Ryanair’s operating fleet was composed of 272 Boeing 737-800 “next generation”
aircraft, each having 189 seats. Ryanair’s fleet totaled 272 Boeing 737-800s at March 31, 2011. The Company
expects to have an operating fleet comprising 294 Boeing 737-800s at March 31, 2012.
Between March 1999 and March, 2011, Ryanair took delivery of 308 new Boeing 737-800 “next
generation” aircraft under its contracts with Boeing (and disposed of 36 such aircraft including 10 lease
handbacks). The new Boeing 737-800s share certain basic characteristics with Ryanair’s prior fleet of Boeing
737-200A aircraft, all of which were retired by December 2005. However, the new aircraft are larger (seating up
to 189 passengers, as compared to 130 in the Boeing 737-200As), capable of longer flights without refueling,
and incorporate more advanced aviation technology. The Boeing 737-800s also comply with Chapter 3 noise
reduction requirements established by the ICAO, which took effect in the EU in 2002.
Ryanair entered into a series of agreements with Boeing for Boeing 737-800 “next generation” aircraft
starting in 1998. As of January 2005, 89 firm-order aircraft remained to be delivered under those agreements,
and the Company had options to purchase an additional 123 aircraft. On February 24, 2005, the Company
announced that it had entered into a new agreement with Boeing for the purchase of a further 70 new Boeing
737-800s as well as purchase options for an additional 70 such aircraft.
Under the terms of the 2005 Boeing contract, while the basic price per aircraft that was applicable
under the prior contracts continued to apply to the firm-order aircraft that remained to be delivered and purchase
options outstanding thereunder, these firm-order and option aircraft became subject to the commercial and other
terms applicable to the firm-order aircraft under the 2005 Boeing contract, including benefiting from more
favorable price concessions.
On December 18, 2009, the Company announced that it was unable to conclude negotiations with
Boeing in respect of a new agreement for the purchase of 100 new Boeing 737-800 series aircraft (with an
option to purchase an additional 100) for delivery during the period 2013 to 2015. Although the Company had
reached agreement with Boeing in relation to the aircraft price and delivery dates it was unable to conclude
negotiations regarding other terms and conditions. The Company has not entered into any agreement to purchase
additional aircraft. However, on June 22, 2011, the Company signed a Memorandum of Understanding with
COMAC, a Chinese aircraft manufacturer, to co-operate and work together in relation to the development of a
174-200 seat commercial aircraft.
Ryanair expects to take delivery of an additional 40 aircraft under its contracts with Boeing over the
period from June 30, 2011 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 13 such
aircraft is completed on schedule). As of June 30, 2011, Ryanair had either sold to third parties or returned to the
relevant lessor 36 Boeing 737-800 aircraft. Depending on market conditions and various other considerations,
Ryanair expects to either dispose of 13 more aircraft or return such aircraft to the relevant lessor during the
period through March 31, 2014. (The foregoing takes 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 89, 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 51 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 two 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