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How Much Does Ryanair Pay For A 738?  
User currently offlineLN-MOW From United States of America, joined Jan 2000, 1908 posts, RR: 14
Posted (9 years 4 months 1 day 16 hours ago) and read 7141 times:

Not much ... Interesting read!

http://seattletimes.nwsource.com/htm...chnology/2002250601_ryanair23.html


- I am LN-MOW, and I approve this message.
31 replies: All unread, showing first 25:
 
User currently onlineNoUFO From Germany, joined Apr 2001, 7950 posts, RR: 12
Reply 1, posted (9 years 4 months 1 day 16 hours ago) and read 7108 times:

Ryanair sold some of the 737 ordered at prices lower than Boeing thus making an additional profit as aircraft seller. Some aircraft have been sold to (I think) ILFC and leased back. It's crazy.

And we can safely assume U2 got similar discounts when they bought their A319s, because they have copied Ryanair's strategy of selling new aircraft only to lease (some of) them back afterwards.



I support the right to arm bears
User currently offlineAa777jr From , joined Dec 1969, posts, RR:
Reply 2, posted (9 years 4 months 1 day 16 hours ago) and read 7088 times:

At the current price of their ticket structure I doubt FR or even U2 pay much for their a/c...a good thing!

User currently offlineBirdwatching From Germany, joined Sep 2003, 3818 posts, RR: 51
Reply 3, posted (9 years 4 months 1 day 14 hours ago) and read 6973 times:

Quoting NoUFO (Reply 1):
Ryanair sold some of the 737 ordered at prices lower than Boeing thus making an additional profit as aircraft seller.

Why don't they pick up a whole bunch of them (like 100) and go sell them to other airlines? Would really tick off Boeing, but hey, who cares?



All the things you probably hate about travelling are warm reminders that I'm home
User currently onlineNoUFO From Germany, joined Apr 2001, 7950 posts, RR: 12
Reply 4, posted (9 years 4 months 1 day 8 hours ago) and read 6835 times:

Actually, they did. Not with 100, but when O'Leary ordered 737s the last time, analysts thought he had gone mad, because the number appereared to be way to high for an economically wise decision.
But an order this big helped Ryanair to buy new jets at a real bargain and to earn some additional money as a reseller. We can safely assume, Boeing was pi$$ed.
At the same time: What should Boeing do? Ryanair is Boeings biggest 737 customer only after WN.



I support the right to arm bears
User currently offlineDfwRevolution From United States of America, joined Jan 2010, 968 posts, RR: 51
Reply 5, posted (9 years 4 months 1 day 8 hours ago) and read 6816 times:

Quoting NoUFO (Reply 4):
But an order this big helped Ryanair to buy new jets at a real bargain and to earn some additional money as a reseller. We can safely assume, Boeing was pi$$ed.

Boeing really can't complain... the mega-order for 737-800s came immediatly in the post-9/11 slump. Several 737 customers deferred their orders and FR was well aware that Boeing would much rather squeak out a narrow profit than cut-back production. In the end:

- Boeing was able to maintain production rates and still make money
- It's in Boeing's interest for a Boeing-loyal airline to grow rapidly and confidently
- It firmly cemented FR as a 737NG loyal airline (see below)
- FR now has favorable status with Boeing, which will give them a leg-up when it comes to defining the "737E"

Sort of a win-win (but much more in FR's favor  Wink )

http://www.boeing.com/randy/images/oleary_737_lg.jpg


User currently offlineKeesje From , joined Dec 1969, posts, RR:
Reply 6, posted (9 years 4 months 1 day 8 hours ago) and read 6786 times:

So it´s official now: Boeing "sells" aircraft at half price.

No more nose in the sky "we don´t sell at a loss" talking anymore..

..or is it generating cashflow / filling production lines 2006-2008 now that other types (717, 747, 757, 767) fully/nearly stopped selling and 787 revenues still years away..


User currently offlineDfwRevolution From United States of America, joined Jan 2010, 968 posts, RR: 51
Reply 7, posted (9 years 4 months 1 day 8 hours ago) and read 6782 times:

Quoting Keesje (Reply 6):
No more nose in the sky "we don´t sell at a loss" talking anymore..

Boeing stated that they refuse to sell airplanes below cost no more than a month ago.

Quoting Keesje (Reply 6):
..or is it generating cashflow / filling production lines
2006-2008 now that other types (717, 747, 757, 767) fully/nearly stopped selling and 787 revenues still years away..

Pal... you could say the exact same thing regarding the A380-800.

Also want to explain how selling airplanes for loss generates short term cash flow? I don't recall any 2-3 year old anything requiring huge amounts of support/spares from the respective OEM.

[Edited 2005-04-24 01:20:27]

User currently offlineRJ111 From , joined Dec 1969, posts, RR:
Reply 8, posted (9 years 4 months 1 day 8 hours ago) and read 6765 times:

It firmly cemented FR as a 737NG loyal airline (see below)

Who knows what FR could pull in the future though.

Hasn't he 'raped' them already, they should put a restaining order on that guy.


User currently offlineDfwRevolution From United States of America, joined Jan 2010, 968 posts, RR: 51
Reply 9, posted (9 years 4 months 1 day 8 hours ago) and read 6752 times:

Quoting RJ111 (Reply 8):
Who knows what FR could pull in the future though.

The chance of an A320 in FR colors is below zero. With the add-on order this year, it's beyond certain that RyanAir will stick with the 737NG program until it is completed. Airbus only "in" would be in the next-gen narrowbody, and it isn't at all as if Boeing is unreceptive to requirements/request of WN and FR


User currently offlineKeesje From , joined Dec 1969, posts, RR:
Reply 10, posted (9 years 4 months 1 day 8 hours ago) and read 6752 times:

Quoting DfwRevolution (Reply 7):
Pal... you could say the exact same thing regarding the A380-800.

I think Airbus has a backlog of more then 1200 aircraft apart from A380´s and sold more then 100 aircraft apart from A380´s in Q1 2005.


User currently offlineShankly From United Kingdom, joined Jan 2000, 1541 posts, RR: 1
Reply 11, posted (9 years 4 months 1 day 8 hours ago) and read 6739 times:

Actually, for each 737-800 all he's paying is $1 for the aircraft and $28,999,999 in taxes

[Edited 2005-04-24 01:34:44]


L1011 - P F M
User currently offlineN1120A From United States of America, joined Dec 2003, 26414 posts, RR: 75
Reply 12, posted (9 years 4 months 1 day 8 hours ago) and read 6734 times:

Quoting Keesje (Reply 6):
So it´s official now: Boeing "sells" aircraft at half price.

No, this was less than a 20% discount

Quoting RJ111 (Reply 8):
Who knows what FR could pull in the future though.

Safe to say anything they pull will not be the plug on their orders. It will likely be charging employees a surcharge for fuel consumed based on the weight they take on the aircraft.



Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
User currently offlineDfwRevolution From United States of America, joined Jan 2010, 968 posts, RR: 51
Reply 13, posted (9 years 4 months 1 day 8 hours ago) and read 6716 times:

Quoting Keesje (Reply 10):
I think Airbus has a backlog of more then 1200 aircraft apart from A380´s and sold more then 100 aircraft apart from A380´s in Q1 2005.

That's confirming my point. 1,000 of those 1,200 aircraft in backlog are A320 series. Airbus has recently been hyper-aggressive (speculativly ramping up production in 2002/2003) with A320 sales, and it isn't unreasonable to assume this is to bridge the time until A388 revenue begins.


User currently offlineAirbusDriver From United States of America, joined Feb 2001, 255 posts, RR: 1
Reply 14, posted (9 years 4 months 1 day 6 hours ago) and read 6644 times:

Quoting N1120A (Reply 12):

No, this was less than a 20% discount

From 61 Millions To 29 Millions is 20% ??? You need to go back to school.
61 to 68= List Price.
51= Start price for FR.
29 = what they paid.

As usual you are talking out of your ass...Go back flying your C172...


User currently offlineN1120A From United States of America, joined Dec 2003, 26414 posts, RR: 75
Reply 15, posted (9 years 4 months 1 day 5 hours ago) and read 6593 times:

Quoting AirbusDriver (Reply 14):
From 61 Millions To 29 Millions is 20% ??? You need to go back to school.
61 to 68= List Price.
51= Start price for FR.
29 = what they paid.

What the hell are you talking about? According to the news reports, FR's price for the 738s in their recent major order is $51.5 million dollars plus $900,000 to APB for winglets.



Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
User currently offlineLN-MOW From United States of America, joined Jan 2000, 1908 posts, RR: 14
Reply 16, posted (9 years 4 months 1 day 5 hours ago) and read 6578 times:

N1120A - read again:

Quote:
However, the filing adds that Boeing granted Ryanair "certain price concessions" in the form of credit and allowances that "will reduce the effective price of each aircraft to Ryanair significantly below the basic price."

Boeing will also provide a range of support services, and will install fuel-conserving winglets at no extra cost.
The document gives one further clue to Ryanair's price tag: It states that 454 million euros (or $593 million) will be required to fund the 29 jets to be delivered between now and March 2006, or about $20 million per aircraft.

And elsewhere it says 30 percent of the price is required in advance of delivery, suggesting the $593 million will pay the remaining 70 percent.

That works out to a bargain price tag on Ryanair's jets of about $29 million.



- I am LN-MOW, and I approve this message.
User currently offlineN1120A From United States of America, joined Dec 2003, 26414 posts, RR: 75
Reply 17, posted (9 years 4 months 1 day 5 hours ago) and read 6554 times:

Quoting LN-MOW (Reply 16):
However, the filing adds that Boeing granted Ryanair "certain price concessions" in the form of credit and allowances that "will reduce the effective price of each aircraft to Ryanair significantly below the basic price."

Wait, so Boeing extending credit is seen as a price reduction? It just means FR will have more time to pay.



Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
User currently offlineLN-MOW From United States of America, joined Jan 2000, 1908 posts, RR: 14
Reply 18, posted (9 years 4 months 1 day 4 hours ago) and read 6515 times:

Read again. How much more specific can it get?

Quote:
The document gives one further clue to Ryanair's price tag: It states that 454 million euros (or $593 million) will be required to fund the 29 jets to be delivered between now and March 2006, or about $20 million per aircraft.

And elsewhere it says 30 percent of the price is required in advance of delivery, suggesting the $593 million will pay the remaining 70 percent.

And ........

Quoting N1120A (Reply 15):
plus $900,000 to APB for winglets.


Quote:
Boeing will also provide a range of support services, and will install fuel-conserving winglets at no extra cost.


.. which should indicate that Boeing will pay APB these 900.000 .....

[Edited 2005-04-24 05:25:37]


- I am LN-MOW, and I approve this message.
User currently offlineMcgoose From Sweden, joined Aug 2004, 37 posts, RR: 0
Reply 19, posted (9 years 4 months 21 hours ago) and read 6391 times:

I interpret it as those $900,000 are not for the winglets but for other equipment. Since it says Boeing will pay for the winglets and not FR.

User currently offlineLHSTR From Germany, joined Mar 2001, 226 posts, RR: 1
Reply 20, posted (9 years 4 months 20 hours ago) and read 6350 times:

The whole problem is what Boeing is considering "the cost" of a B737.

Specially in difficult times, e.g. after 9/11) Boeing has an interest of staying in business. For new orders it needs to assure that all variable cost is covered by the customer, but every penny that is above the variable cost helps Boeing to pay for its fix cost. Therefore you accept "loss making" orders as long as you are at least parially able to pay for the fix cost.

This is only one aspect. The next aspect is how the cost is diveded between all of Boeings products. Most materials and production hours can be easily connected to one product. But all the other cost, e.g. overhead, needs to be split according to some factors. These factors are defined by Boeing. Therefore the final cost of a product is totally according to Boeing's own definition.

Therefore, the production cost of a B737 does not exist. This whole argument is also true for Airbus and the A320. All these discussions about Airbus or Boeing discounting their airplanes and selling them below cost is absolute nonsense. At least for us who dont have access to detailed data about the production cost.


User currently offlinePlaneSmart From New Zealand, joined Dec 2004, 896 posts, RR: 0
Reply 21, posted (9 years 4 months 20 hours ago) and read 6335 times:

The devils in the detail.

Ryanair is purchasing the winglets - Boeing is fitting them for free on the production line.

Receiving extended credit is an effective price reduction (reduced funding costs).

Airlines ordering new aircraft, then leasing them all (or a %) is common practice. It's part of prudent financial management.

And depending on what and how much they sold them for, and the terms on which they leased them back, there may be siginificant tax benefits too.

Finally, GECAS & ILFC get very sharp pricing from both A & B, and they get assistance in other ways too.


User currently offlineKeesje From , joined Dec 1969, posts, RR:
Reply 22, posted (9 years 4 months 18 hours ago) and read 6256 times:

Quoting DfwRevolution (Reply 13):
That's confirming my point. 1,000 of those 1,200 aircraft in backlog are A320 series.

That is if you don´t count in the hundreds of 330/40´s still to be delivered.


User currently offlineNavion From United States of America, joined May 1999, 1012 posts, RR: 1
Reply 23, posted (9 years 4 months 16 hours ago) and read 5921 times:

I did get one quick glimmer of how deeply Airbus is discounting A320's when a J.P. Morgan analyst recently stated U2 paid $24 Million a copy for their A319's. Anyone else read this article about 2 months ago? It was part of an article in a financial periodical but I don't recall if it was the Wall Street Journal, Barrons, or some other source. The analyst gave some great insight into the Easyjet deal and it was unbelievable, especially in light of the training and other incentives thrown in. Airbus would have to do some incredibly creative accounting to claim profit on the U2 deal. I know of Falcon 2000's and Challenger 604's that cost a few million more than U2's A319's.

User currently offlineTrex8 From United States of America, joined Nov 2002, 4745 posts, RR: 14
Reply 24, posted (9 years 4 months 15 hours ago) and read 5676 times:
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Quoting Navion (Reply 23):
Airbus would have to do some incredibly creative accounting to claim profit on the U2 deal.

they don't have to make a profit, the A320 line has paid for itself and those Euro govts who financed the project 2 decades ago have been getting royalties (above their loans + interest payments) since the late 90s. they could take a loss, or barely break even on their narrowbodies, simply to keep market share or keep potential widebody customers in their camp by "giving away" narrowbodies. its the same thing car manufacturers do all the time.

given an A330 "list price" is supposed to be almost close to mid one hundreds million$, the fact that NW reportedly got some for something like in the 60s and CI financed their first 3 for only 70 shows "half price" discounts are getting to be the norm!


25 Post contains images Aviationfreak : Well, considering the fact their personnel have to pay for the uniforms they are wearing maybe the pilots have to pay for the a/c they are flying.
26 NoUFO : That's correct, but Boeing would have been better off with more carriers placing their orders in Seattle than in Dublin and a somewhat smaller FR ord
27 Post contains links MidnightMike : Nope, your math is off, just a bit: The price for each 737-800 airplane will be about $51 million, including the engines and some optional features,
28 N1120A : He did, hence he saud 1,000 of the 1,200 were A32S
29 Post contains images Keesje : ah, now the 380s are gone..
30 N1120A : Well, make that 1064 out of 1531 as of the end of March
31 Lrgt : U2 did INDEED...according to the Wall Street Journal from February, they paid $22M for their A319's. This is about the same level of discount FR rece
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