This article from NYTimes.com has been sent to you by psa188@juno.com. Ryanair Orders 100 Planes; Agrees to Buy an Ailing Rival February 1, 2003 By BRIAN LAVERY DUBLIN, Jan. 31 - Ryanair, the discount Irish airline, has committed itself to buying 100 more 737-800 aircraft from Boeing, less than a year after ordering 150 of the planes, the companies said today. The deal coincided with Ryanair's first corporate acquisition, of Buzz, the ailing discount airline, from KLM Royal Dutch Airlines for 23.9 million euros ($25.7 million) in cash. Ryanair said the real cost was less than 5 million euros ($5.4 million), because Buzz comes with cash reserves of 19 million euros ($20.4 million). Ryanair said it would eliminate Buzz's operating losses by giving older, inefficient airplanes back to KLM; pulling out of expensive, congested airports; and doubling its traffic to four million passengers in 12 months. "Since Ryanair is growing strongly by rolling out our lowest-fare services all over Europe, the last thing we need is the distraction of an acquisition," Michael O'Leary, Ryanair's chief executive, said in a statement. "Whilst it has been our policy to avoid acquisitions, this opportunity, at this nominal cost, is the type of offer which we could not refuse." Ryanair placed firm orders for 22 of the Boeing 737's, which will be delivered in 2004 or 2005, and options to buy 78 more. The total order has a list price of $6 billion, although Boeing is widely thought to have given deep discounts. The financial terms were not disclosed. With today's order, Ryanair has bought 125 737-800's in the last year, and taken options on 125 more, adding to its current fleet of 50 Boeing 737's. With the new planes, Ryanair will be able to carry more than 50 million passengers a year, the company said. Despite a worldwide slump in aviation, passenger traffic has surged for Ryanair: the airline estimates that in the year to March 2003, it will carry 15 million people, up 35 percent from the previous year. On Tuesday, Ryanair said it would open a Scandinavian hub in Skavska, outside Stockholm, in April; next week, it begins operations at its new Italian hub in Milan. Such rapid growth for a once-tiny company "won't fundamentally change the way they do business," said Shane Matthews, an analyst with NCB Stockbrokers in Dublin. "There's been a deepening of the management team over the last three to six months," he added, and that will help Ryanair handle its broad geographic spread and increasing financial bulk. He said that Ryanair was likely to increase its presence in Germany or the Iberian Peninsula later this year. Shares in Ryanair rose 2 percent, to 6.69 euros, on the Irish Stock Exchange. "They've demonstrated in the past that they're able to grow organically at 35 percent per year," said James Forbes, an equity analyst at Hibernian Investment Managers in Dublin. The purchase of 100 new 737's would eventually create 3,000 jobs, but Mr. Forbes said that the rise in passenger traffic had so far not been matched by rising staff costs. Ryanair has kept staff costs down in part by eliminating its sales force. It now takes bookings almost exclusively through its Web site. With the new fleet of Boeings, Ryanair will become bigger than EasyJet of Britain, its chief rival in the low-budget airline market. But Mr. O'Leary denied that Ryanair competed with EasyJet, since most of EasyJet's routes are based in Britain, and Ryanair typically expands into markets that have only one major national airline. "We're going after the big guys, because that's where the easiest competition is," he said. http://www.nytimes.com/2003/02/01/business/worldbusiness/01RYAN.html?ex=1045111803&ei=1&en=26585d579e865a87 HOW TO ADVERTISE --------------------------------- For information on advertising in e-mail newsletters or other creative advertising opportunities with The New York Times on the Web, please contact onlinesales@nytimes.com or visit our online media kit at http://www.nytimes.com/adinfo For general information about NYTimes.com, write to help@nytimes.com. Copyright 2002 The New York Times Company