=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SF Gate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2003/01/31/f= inancial0803EST0019.DTL ---------------------------------------------------------------------- Friday, January 31, 2003 (AP) Ryanair agrees to buy rival low-cost carrier buzz, orders planes from Boeing MICHAEL McDONOUGH, Associated Press Writer (01-31) 05:03 PST LONDON (AP) -- Low-cost carrier Ryanair said Friday it will buy loss-making rival buzz for about $24.7 million in a deal that would leave it with only one major rival in the European no-frills airline market, Britain's easyJet. Separately, Ireland-based Ryanair said Friday it has placed an order for 22 new Boeing 737-800 jets with options for 78 more in a deal potentially worth $6 billion. Ryanair said it agreed acquire buzz from KLM Royal Dutch Airlines for 23= 9 million euros, and would draw on cash reserves of more than 1.05 billion euros ($1.13 billion) to pay for the purchase. Ryanair chief executive Michael O'Leary described the takeover as a bargain that his company couldn't pass up, despite its policy of avoiding acquisitions. "This opportunity, at this nominal cost, is the type of offer which we could not refuse," O'Leary said. "The financial cost is small and the diversion of management time will be minimal since buzz is based at our main United Kingdom base." Buzz operates a network of 21 routes from London Stansted -- Ryanair's main British base -- to destinations in Germany, Holland, France and Spain, as well as two French domestic routes. Ryanair said it would expand further at Stansted as a result of the deal, which would also increase the number of passengers buzz carries from just under 2 million a year to over 4 million a year. O'Leary said buzz suffered from an expensive fleet and congested airport= s, but claimed Ryanair would "solve both problems within 12 months." KLM will take back buzz's six BAE 146 aircraft by March 2004, and Ryanair will replace them with Boeing 737s, the Dublin-based carrier said. Buzz already has six Boeing 737s. "I am confident that this significant and timely rationalization will eliminate these losses in buzz over the coming year," O'Leary said. Ryanair's airplane order announced Friday comes on top of the one Ryanair placed last year for 100 737s, with an option to buy 50 more. It has since exercised three of those options. The latest order means Ryanair will increase its fleet of 737s to a total 250 over the next eight years. The carrier described the deal as being worth up to "a value of $6 billion." Boeing confirmed that was the list price for 100 aircraft but declined to comment on whether Ryanair had secured any discount. Ryanair serves 100 destinations in 15 countries, and carried over 15 million passengers in the year ending March 31, 2003. It said it expected to be able to carry 50 million passengers a year thanks to the new aircraft. Ryanair Chief Executive Michael O'Leary announced the deal in London, describing 737s as "the best short haul jet aircraft in the world." Buzz is due to report revenues of 140 million euros ($151.4 million) in the year ending March 31. But last week, KLM said it was considering selling the carrier because it had failed to attract the expected number of customers. Ryanair and KLM said their boards approved the purchase, which they expe= ct to go ahead in early April, if antitrust regulators authorize it. The deal was the second major takeover in a year in Europe's low-cost airline sector. In May, easyJet agreed to buy British rival Go for 374 million pounds ($542 million). On the Net: Ryanair, www.ryanair.com/ buzz, www.buzzaway.com Boeing,www.boeing.com/ =20 ---------------------------------------------------------------------- Copyright 2003 AP