Boeing wins major 737 jet order from Ryanair

European discount airline Ryanair will buy 175 of Boeing's popular 737 jets, the largest order ever placed by a European carrier.

Ryanair is one of the world's wealthiest airlines, with more than $4 billion in cash available. Its business model offering Internet-only sales of low-fare tickets - accompanied by a panoply of extra charges for credit card payments, checked baggage, boarding cards and reserved seats - is increasingly copied by the industry.

Ryanair CEO Michael O'Leary said the deal will allow his airline to expand in markets such as Germany, Spain, Italy, Poland and Scandinavia.

Neither side disclosed the purchase price for the 737-800s, but O'Leary said it did negotiate a bulk discount off the total list price of $15.6 billion.

Ryanair received a 53 per cent discount on a prior 737 order. This time, O'Leary said he was paying "slightly higher" prices.

"I'm paying higher prices, I'm just not allowed to say so," O'Leary said, joking that Boeing executives got him drunk on St. Patrick's Day.

He said Ryanair will cease dividends and share buybacks for the next two to three years to help pay for the jets.

Chicago-based Boeing Co has struggled ever since its new 787 Dreamliner was grounded by regulators in January following problems with its electrical system.

It also was dealt a major blow on Monday in the race to win the single-aisle plane market when Indonesia's Lion Air signed a deal with rival Airbus for 234 A320s.

Ryanair already operates a fleet of 305 Boeing 737-800 aircraft, each with 189 seats, one of the tightest configurations in the industry. It is Boeing's biggest European customer for the model, which launched in 1997 and faces global competition from the Airbus A320.

Boeing's primary 737 assembly line in Washington faces a transition to building a newer model called the 737 MAX by 2017. Ryanair's order represents about a half-year of full-time work for the plant.

Ryanair has yet to sign on for the new MAX jet, but O'Leary said he has assembled a team to evaluate the new version of the 737.

"Today's order is a very much interim order and will hopefully be a forerunner to ordering the MAX later on," he said at a signing ceremony in New York.

Ryanair expects to get the first new planes at the end of 2014. O'Leary said about 75 of the new-order 737s would replace older airplanes, but the fleet would grow to 400 by 2019. He said Ryanair expected its passenger volume to grow around 20 per cent to 100 million passengers by 2019, by which time its workforce would expand from 8,500 to around 11,500.