Aircraft Retirements
Ryanair Holdings PLC
19 September 2003
RYANAIR ANNOUNCE RETIREMENT OF UP TO 9 BOEING 737-200'S
As previously announced, Ryanair is currently taking delivery of 15 new Boeing
737-800 aircraft over the next six months, with a further 29 aircraft due for
delivery in the 12 months thereafter. This delivery program was designed to
facilitate the growth of the Company and the retirement of our 21 Boeing 737-200
series aircraft. The first 7 Boeing 737-200's were planned for retirement this
winter and the balance over the following 18 months. For the reasons outlined
below, Ryanair has now decided that it may increase the number of retirements
this winter from 7 to 9 x 737-200's and bring forward their anticipated date of
retirement.
During the course of a recent scheduled aircraft overhaul Ryanair became aware
of some scratches (or scribing) to the outer skin of a Boeing 737-200 series
aircraft, which indicated that an inappropriate procedure may have been
undertaken during the course of that aircraft's last full repainting which was
undertaken by FLS Aerospace in the UK.
Ryanair together with experts from Boeing, has established that a further 10
(making 11 in total) of our 21 x 737-200 series aircraft passed through this FLS
Aerospace paint shop in the UK during the relevant period. Ryanair has
implemented the recommended Boeing inspection program to examine these aircraft
in detail and Ryanair will continue to work closely with Boeing and the Irish
Aviation Authority following their recommended and approved procedures. To date
these inspections indicate that 2 of the 11 aircraft appear not to be affected
by these scratch marks, and 5 appear to be affected. The remaining 4 aircraft
are being inspected in accordance with the Boeing recommended and approved
guidelines.
Given the planned retirement of the 737-200's, and the cost of repairing any
affected aircraft, the Board of Ryanair have decided that it would not be
economically viable to carry out these repairs and any of these aircraft, so
affected, will be retired.
To cover for the possible earlier retirement of these aircraft pending the
delivery of 15 new 737-800's over the next six months, Ryanair have arranged for
the short term lease in of 2 x Boeing 737-800's, 2 x Boeing 737-300's, and 1 x
737-200. Any further retirements will be replaced by our new 737-800 deliveries.
There will be no shortage of seat capacity or disruption to our schedule, given
these lease-ins and the delivery of the new 737-800 series aircraft.
The cost of these lease-ins over the coming 3 to 5 months will be partially
offset by cost savings from the earlier retirement of between 7 to 9 of the
older 737-200's and the additional revenues generated by the larger aircraft
leased in. Accordingly the net effect of the above program will result in a one
time exceptional charge of approximately €5m in the fiscal year ended March 31,
2004.
Ends. Friday, 19th September 2003
For reference: Pauline McAlester
Murray Consultants
Tel: 00-353-1-4980300
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