Ryanair expands fleet with $4bn Boeing deal

Ryanair, the low-cost Irish carrier, underlined its determination to become Europe's biggest airline yesterday by placing orders for a further 70 Boeing 737-800 jets with a list price of more than $4bn (£2bn).

The latest deal with Boeing will take the Ryanair fleet to 225 aircraft by 2012 by which time it expects to be flying about 70 million passengers a year - double the number it expects to carry this year.

The increase in the fleet will create an extra 2,500 jobs at Ryanair, taking the workforce to 5,500. Half the new jobs will be at its existing 12 bases around Europe while the other half will be located at the 10 new bases the airline plans to open over the next seven years.

Michael O'Leary, Ryanair's chief executive, refused to disclose the discount the airline had received from Boeing but the rule of thumb on such large orders is a saving on list price of up to 40 per cent. Mr O'Leary did, however, disclose that the price of the new aircraft is less than Ryanair agreed to pay when it announced its original order for 155 Boeing 737-800s three years ago and that the price reduction would apply retrospectively to the 80 or so aircraft still to be delivered under that contract. Most of the new aircraft will be bought outright rather than leased.

The latest deal also involves improved support terms over the life of the aircraft and agreement to retrofit Ryanair's existing 737-800s with modified winglets which cut fuel consumption by 2 per cent.

Mr O'Leary said the growth Ryanair plans would not include expansion at Stansted unless the airport operator BAA cut the proposed cost of the second runway there massively. BAA plans to spend £2bn but Ryanair says it could be built for £150m.

The Ryanair boss also stood by his forecast of a "bloodbath" across the airline market, although its fares had held up better than expected. "There will be more casualties. I don't think we overhyped it. It is still pretty crap out there," he said.

The presence at yesterday's announcement of Ryanair's chairman David Bonderman, the head of the private equity group Texas Pacific, had led to speculation that the airline intended to disclose some major news such as the management succession. But Ryanair disappointed analysts. "As long as Michael wants to run the place and keep up his wit, I will be happy for him to do that," Mr Bonderman said.