Ireland-based low cost carrier Ryanair Holdings Plc (RYAAY, RYA.L) is close to announcing a $15 billion order for about 170 aircraft from Boeing Co. (BA), according to media reports on Tuesday.
The order for the 737 model aircraft, known as the Next-Generation or NG, will reportedly be the single-biggest aircraft purchase ever by Ryanair. The order is intended to replace Ryanair's existing 737 aircraft and will enable the carrier to expand its footprint beyond Europe. The 737-800 model is valued at $89.1 million at list prices, according to Boeing's website.
According to the Irish Independent newspaper, the order is set to be confirmed by U.S. President Barack Obama and Irish Prime Minister Enda Kenny at the White House during an annual reception to mark St. Patrick's Day.
The potential order will deliver a boost to Boeing after the cvompany won approval from the Federal Aviation Administration earlier on Tuesday for plans to test and certify improvements to the battery system on its now grounded 787 Dreamliner fleet.
Boeing plans to phase out the NG in favor of the new 737 Max version. The 737 Max builds on the strengths of the NG and incorporates the latest-technology CFM International LEAP-1B engines.
Boeing decided in July 2011 to revamp the top-selling 737 instead of building an all-new aircraft. The company plans to introduce the Max version with its more efficient engines in 2017 after phasing out the current 737 model. The 737 Max is designed to compete with the Airbus' fuel efficient A320neo in the narrow-body aircraft segment.
Media news about the order by Ryanair comes even as the company plans to appeal a recent decision by the European Commission to block a third attempt by the airline to take over its Irish rival Aer Lingus Group plc (AERL.L) over competition concerns.
Ryanair said in late February that the history of the EU's treatment of its takeover offers for Aer Lingus conclusively proved that the prohibition was a "political" decision to pander to the vested interests of the Irish Government, a minority 25 percent shareholder in Aer Lingus, and was not one that was based on a fair and reasonable application of EU competition rules or precedent airline merger approvals in Europe.
RYAAY closed Tuesday's trading on the Nasdaq at $39.77. In after-hours, the stock declined $3.00 or 7.54 percent to $36.77.
BA closed Tuesday's trading at $84.16, up $1.22 or 1.47 percent on a volume of 6.60 million shares.
For comments and feedback: editorial@rttnews.com