Ryanair ends talks with Boeing

Ryanair confirmed this morning it has terminated negotiations with Boeing for an order of up to 200 new B737-800 series aircraft for delivery between 2013 and 2016 .

The airline said the breakdown in negotiations will not affect its plans to take delivery of 112 B737-800 aircraft during the next three years.

The announcement was expected after Ryanair chief executive Michael O'Leary said earlier this week that a deal was unlikely because the US plane manufacturer wanted to change the delivery conditions.

Mr O’Leary has previously warned that in the absence of an agreement with Boeing, Ryanair would “change course” and slow its growth post-2012 – at which point it expects to be carrying 90 million passengers – and distribute cash to shareholders.

In a statement this morning, Mr Michael O’Leary said while the airline had reached agreement with Boeing on pricing the plane manufacturer "was unwilling to incorporate some other terms and conditions from our existing agreement into this new aircraft order."

Ryanair has made clear to Boeing that we will not order aircraft if we believe that either the pricing or the other contractual terms and conditions will be inferior to those which we currently enjoy, as this would not be a wise or sensible use of shareholders funds," he said.

The airline said it does not intend to reopen discussions with Boeing or any other aircraft manufacturers.

"We will focus our efforts on maintaining Ryanair’s strong traffic and new route growth into 2010 and we look forward to briefing shareholders in the first quarter of the New Year with a revised strategy which will comprise much reduced capital expenditures through 2011 and 2012, thereby generating substantial surplus cash balances for distribution during the period 2012-2015," said Mr O'Leary.

"I believe it is appropriate to return these surplus funds to shareholders, if we cannot use them to purchase aircraft on terms which enable us to meet our demanding return on capital targets," he added.