Dublin-based Ryanair Holdings PLC (Nasdaq:RYAAY), which owns the largest discount carrier In Europe, is expected to announce an order for 200 737 Next Generation aircraft from The Boeing Company (NYSE:BA).
The deal is expected to be formally announced when Irish Taoiseach Enda Kenny and U.S. President Barack Obama meet at the annual St. Patrick’s Day White House reception on Sunday, according to Irish media reports.
The listed value of the single-aisle aircraft is $89.1 million on Boeing’s website, which would put the value of the deal at $17.8 billion. But the aircraft, also known as the 737-800, is being phased out and replaced by the more advanced (and costlier) 737 MAX.
The deal is a boon to Boeing, which doesn’t expect the new 737 model to be ready for the skies until 2017. This order would help make a nice financial bookend to the life of the 737NG and keep production going until the newer model is ready.
Ryanair, which currently has 348 Boeing 737s, is likely to get a discount on the new order. In 2005 the company received a 53 percent reduction to the listed price of the aircraft, according to regulatory filings obtained by The Seattle Times. If the same discount were applied to the new order it would knock $9.4 billion off the listed price.
A similar discount is likely. In 2009, Ryanair CEO Michael O’Leary ended negotiations with the Chicago-based aerospace giant for an order of 200 of the jets after failing to get the price reduction he desired.