Despite the low-season winter season, Ryanair achieved surprisingly high quarterly sales. Nevertheless, the airline has to put up with a damper. The Boeing 737 Max launch ban will throw the Irish back on their growth plans.
Because of the increasingly long-standing worldwide flight ban of the Boeing 737 Max aircraft, the Irish low-cost airline Ryanair has to collect its long-term goal for passenger growth for the time being. The airline will reach the threshold of 200 million passengers a year or two later than previously planned, said the airline in Dublin. Instead of reaching this goal by 2025 or 2026 at the earliest in the financial year by the end of March 2024, it was said.
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With a firm order for a total of 210 Max models, the airline, which for cost reasons only flies with Boeing aircraft, is one of the largest Boeing customers. The aircraft model, which is a fundamentally revised version of the tried and tested 737 jet series, must remain on the ground due to two crashes in October 2018 and March 2019 with a total of 346 fatalities.
This is a serious problem for Ryanair: Originally, 58 new Max-Fliers should go into operation with the low-cost airline next summer. The machines were scheduled. However, Ryanair boss Michael O’Leary no longer expects the first Boeing 737 Max to be delivered before September or October 2020.
The Ryanair group operates an aircraft fleet with more than 470 medium-haul jets. Almost all of them are the conventional Boeing 737, only the Austrian Ryanair branch Lauda is on the road with the competitor Airbus A320. The Ryanair leadership continues to build on the success of the “Max” and the lower kerosene consumption compared to the previous model, which the aircraft owes, among other things, to its significantly larger engines.
Following the two 737 Max crashes, the model has been banned worldwide since March 2019. Manufacturer Boeing is now expecting the ban to be lifted no earlier than mid-2020.
Still high quarterly sales
In the third quarter just ended until the end of December, Ryanair was in the black thanks to unusually strong demand and higher ticket prices: the bottom line was a profit of EUR 88 million after a loss of EUR 66 million a year earlier. In the winter half of the year when travel is weak, the low-cost airlines geared towards holidaymakers generally write losses or at most scratch the break-even point. They generate their profits especially during the main travel season in summer.
While Ryanair’s number of passengers rose six percent to 35.9 million in the past quarter, revenue jumped 21 percent to 1.9 billion euros. Ticket prices rose by nine percent, additional revenues for preferred boarding and the selection of seats even increased by 28 percent.
Thanks to the unexpectedly good business performance, the Ryanair management raised its profit forecast in early January. In the fiscal year ending at the end of March, profits are expected to reach between 950 million and 1.05 billion euros. Earlier, O’Leary had promised 800 to 900 million euros after the result had plummeted to 885 million euros in the previous year.
Meanwhile, dissatisfied customers are lining up at Boeing: So far, the US aircraft manufacturer has only been able to deliver 387 of the more than 5,000 pre-ordered aircraft. However, these jets cannot be used in flight operations until further notice. The outstanding orders currently add up to more than 4600 machines. It is not known how many customers are considering canceling their orders or renegotiating any discounts.
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