European low-cost airline Ryanair has said that it is likely to cut schedules and increase airfares over concerns Boeing will not be able to deliver all of the 50 737 MAX aircraft it expected in time for the summer season.
CEO Michael O’Leary told reporters the airline was now expecting to receive around 40 aircraft from Boeing before July, despite the order of 57 737 MAXs originally scheduled for mid-2023 and 2024 delivery. O’Leary said it meant Ryanair would likely raise fares by between five and 10% to reflect the lower capacity.
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He said: “Our growth has been constrained because at this point in time we don’t really know how many aircraft we’re going to get from Boeing. I think 40 looks like the most realistic number but that’s moved down from 50 in the last two weeks.”
“There is a debate with Boeing as to whether we’re entitled [to] some compensation for these delayed deliveries,” he added.
The airline’s warnings come amid ongoing delays for Boeing’s 737 MAX programme, which recently saw the ousting of chief Ed Clark as part of a shakeup in response to quality control concerns following missing bolts that likely led to the door plug blowout on an Alaska Airlines 737 aircraft and delays after the discovery of mis-drilled holes on around 50 undelivered aircraft.
O’Leary’s warnings will likely only add to scrutiny of the company’s ability to deliver aircraft on time, especially alongside similar concerns from the CEO of United Airlines who said that his company was working on an alternative plan for its future that did not include the delivery of an order of 150 MAX 10 aircraft after years of delays.
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By GlobalDataBut O’Leary’s tone was at odds with the sentiment he portrayed in January when he offered to help Boeing out if other airlines dropped orders on safety fears.
“We have told them if some of these American airlines don’t want to take the MAX 10 aircraft, Ryanair will take those aircraft,” he said.
With Airbus also allegedly suffering delays to its deliveries, the issue of a lack of aircraft to meet travel demands is a growing concern for airlines, however, Nick Wyatt, head of travel and tourism research and analysis at GlobalData, said any knock-on effects are unlikely to affect passenger demands.
He said: “Less capacity will impact the supply-demand balance and this will, in all likelihood, lead to increased prices thanks to the dynamic pricing model that is prevalent in the airline industry.
“However, it is worth noting that Ryanair is among the most cost-competitive airlines so any increase won’t suddenly make the airline overly expensive, particularly when you consider the fact that other carriers will be impacted by the same Boeing delivery issue.
“Air fares have seen notable increases over the last 12 months due to buoyant demand, and I fully expect demand for air travel, particularly at the budget end of the market, to remain extremely robust.”
Ryanair’s latest concerns mark a slight change in attitude for the airline, which had previously offered to take on rejected or unsold 737 MAX 10 planes in response to claims like that of United’s, despite O’Leary’s company already having 300 orders of the MAX 10 in place.
