* Close to buying at least 100 high-capacity MAX - sources
* Aircraft to carry just under 200 passengers
* Planemakers add seats to appeal to ultra-low cost carriers
(Adds analyst quotes, details)
By Tim Hepher and Conor Humphries
PARIS/DUBLIN, Sept 5 Irish low-cost airline
Ryanair is in advanced talks to buy at least 100 Boeing
737 MAX jetliners with extra seats in a potential $10 billion
deal that could be finalised in days or weeks, two people
familiar with the matter said.
The move comes two months after Boeing said it was studying
plans to offer more seating in its upcoming 737 MAX by
introducing a version with 200 seats, 11 more than the current
A deal for about 100 of those aircraft could be reached as
early as the middle of September, one of the people said, asking
not to be identified because the talks are confidential.
"Ryanair does not comment upon, or engage in, rumour or
speculation," a spokesman for the airline said. A European
spokesman for Boeing Co declined to comment.
A new order from Europe's biggest no-frills carrier would
mark a new phase in efforts by Boeing and European rival Airbus
to appeal to ultra-low cost carriers.
Both manufacturers are adding seats to drive down the
operating costs per seat, the key driver of aircraft economics.
"The 200-seat version is almost tailor made for Ryanair,"
said Stephen Furlong, an analyst with Davy Stockbrokers in
Dublin. "In addition to the fuel efficiency, the extra seats
should give them an extra 5 percent unit cost savings."
Keeping up demand for the most popular types of airliner has
become the Holy Grail for both planemakers as they embark on
ambitious production plans, with higher output volumes playing
an important role in cutting costs and boosting margins.
In June, Airbus said it would increase the maximum number of
seats on its revamped A320neo to 189, matching the capacity
limit on the main variant of the Boeing 737 MAX and providing
fuel savings of 3.5 percent per seat.
Weeks later, Boeing leapfrogged its European rival by
announcing plans to offer a 200-seat version of the 737-8 MAX,
which Boeing Commercial Airplanes Chief Executive Ray Conner
said would offer unspecified cost savings of 5 percent per seat.
One industry source said Ryanair was expected to place a
large order for the modified version of the 737-8 MAX and that
this could happen "soon".
Another source said Ryanair had been shopping for at least
100 and possibly as many as 150 of the higher-capacity aircraft.
Ryanair shares were up 0.8 percent at 1525 GMT, compared
with a fall of 0.4 percent on the Thomson Reuters Europe
Ryanair Chief Executive Michael O'Leary, who has developed a
reputation for securing bargain aircraft, would be able to take
advantage of low interest rates and Boeing's eagerness to have a
large launch customer for its latest variant of the MAX.
He has long lobbied aircraft makers to produce a plane with
just under 200 seats to maximize the ratio of passengers to
cabin crew. Airlines must provide one flight attendant for every
O'Leary offered at one point to buy planes from Chinese
manufacturer Comac if they filled this requirement.
Ryanair last year signed a $15.6 billion contract to buy 175
Boeing 737-800 jets, the largest single order ever placed by a
European airline with Boeing, with the first of the aircraft due
for delivery later this month. It later upped the order to 180.
It needs the planes to boost its traffic to 120 million
passengers per year by 2022 from just over 80 million today.
In July, O'Leary welcomed the decision to study a
higher-density version of the 737 MAX and said he would maintain
the order for current-generation 737.
"We will take those aircraft as is, but for the next round
of aircraft, (for the period) 2019 to 2025, we are looking at
the 189-seat Airbus or what I hope will be a 197- to 198-seat
737," he was quoted as saying by Flightglobal.
Ryanair has had somewhat bumpy relations with Airbus, but
discussed the possibility of breaking away from Boeing as an
exclusive supplier as it continues to expand, according to
industry sources. However, Airbus was seen as unwilling to match
Boeing's prices for the airline.
"Ryanair are a massive customer for Boeing, so they will
clearly treat them well," said Davy analyst Stephen Furlong. "If
you were Boeing and you lost Ryanair, that would be huge. There
is dependence, but its mutual."
(Editing by Mark Potter and David Clarke)