Ryanair got 40% Boeing discount- analyst

Ryanair has confirmed that it has paid substantially less than the $9 billion list value of its deal for 100 Boeing 737s and options on 50 further aircraft.

Chris Tarry, analyst at Commerzbank, estimates Ryanair achieved discounts of 40-50%, putting the real value of the deal closer to $5 billion.

Ryanair chief financial officer Michael Cawley said that 85% of the value of the deal would be guaranteed by the US government. This will allow Ryanair to borrow money for the deal at a lower interest rate than if it was offering banks the planes as security for the debt.

But Cawley did not rule out a share placing by Ryanair in the future to fund part of the deal.

The first batch of 10 planes will be delivered next year, with the remainder spread out over the following 10 years.

The order is a significant boost for Boeing, whose profits slumped 80% in the last quarter as the aviation sector was rocked by the fall-out from September 11.

Toby Bright, executive vice president of sales at Boeing, told RTE the deal was a great start to the New Year for Boeing, but he said the tough negotiations had seen a number of sleepless nights for those involved.

The deal is the biggest ever by a European airline, and Cawley said Ryanair would carry 40 million passengers per year by 2010, and could be up to 55 million if the options to buy 50 further planes were exercised.

Ryanair expects the new fleet will create over 3,000 new jobs with positions for over 800 pilots and 2,000 cabin crew. 400 engineering and operations positions will also be created.

'The timing of this large order vindicates Ryanair's conservative approach to aircraft financing and balance sheet strength in recent years,' Ryanair's chief executive Michael O'Leary said.

'We presently have €700 million in cash and this financial strength has enabled us to move quickly and take advantage of opportune times to buy new cost efficient aircraft and continue our growth at a time when many of our competitors are in turmoil,' he said.

* Ryanair chief executive Michael O'Leary today described the Government's tourism policy as 'Stalinist'.

Speaking in London this morning, Mr O'Leary accused Public Enterprise Minister Mary O'Rourke and Aer Rianta of driving up access costs to Ireland and protecting a state monopoly.

He said that while the airline had grown from carrying one million passengers to 10 million passengers in 10 years, most of Ryanair's growth today was outside Ireland due to Government policy.