Ryanair snubs Boeing by announcing jet design pact with China's Comac

 Published: 6/20/2011 11:46:04 AM GMT
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Ryanair is to announce a jet design agreement with a Chinese manufacturer on Tuesday, firing a warning shot to Boeing that it cannot expect another multibillion-pound aircraft order from the low-cost carrier.

Europe's biggest short-haul airline has agreed terms with Commercial Aircraft Corporation of China (Comac) to help design an aircraft that could rival Ryanair's fleet aircraft, the Boeing 737.

The Dublin-based carrier broke off talks with Boeing over a new order last year and has been openly planning to consider another manufacturer if it expands further after 2013.

Ryanair is keen to acquire an aircraft with up to 200 seats, compared with 189 in the Boeing 737. Eleven more passengers paying an average fare of €43 (£38) would boost Ryanair's already impressive profit margins – although going above 200 would require an additional crew member and push up flight costs.

The low-cost airline has 272 aircraft and is due to receive about 30 more over the next two years under a previous Boeing order.

Ryanair is interested in Comac's planned C919 aircraft, which is being developed to rival the Boeing 737 and the Airbus A320, the dominant players in the commercial aircraft market.

However, the Chinese jet is not expected to be available until 2016 at the earliest and it is understood that the memorandum of understanding does not include a commitment to acquire aircraft.

This is common in similar agreements between airlines and mainstream manufacturers where carriers provide advice on issues such as cabin layout. British Airways announced a similar agreement with Comac last year and industry observers believe that Ryanair, never shy of negotiating in public, could be using the Comac tie-up to strong-arm Boeing.

The Ryanair-Comac announcement comes after the Paris air show in Le Bourget got under way with a flurry of deals involving Boeing, Airbus and Rolls-Royce, one of the world's largest aircraft engine makers.

Boeing said that Qatar Airways had ordered six long-range 777 jets worth $1.7bn (£1bn) before discounts, although Qatar added that it hoped to seal a deal for Airbus's A320 'neo', which flies with a new engine that makes the aircraft 15% more fuel-efficient.

Boeing said it was more likely to design a new 737, the closest rival to the A320, rather than relaunch it with new engines.

The US manufacturer also announced an order for 17 of its new, extended 747-8 jumbo jets from two undisclosed airlines, in a deal that would be worth $5.4bn at pre-discount prices.

Shrugging off a public relations mishap that saw an A380 superjumbo taken out of action by a slow-speed prang with a building at Le Bourget, Airbus said it had won a $5.1bn order for 60 A320 'neo' jets from General Electric's aircraft leasing arm.

Rolls-Royce concluded a deal with Brazil's TAM Airlines to provide Trent XWB engines for the Airbus A350 in an agreement worth $2.2bn.

Airlines from the Middle East and Asian countries are expected to dominate the announcements at the air show, reflecting the major sources of growth in the global market.


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