Ryanair blames base closures on MAX delays

206
December 06, 2019
Ryanair737 MAX
Photo: Ryanair.

Ryanair has again reduced its growth expectations for 2020, blaming delays in the delivery of Boeing 737 MAX aircraft.

Boeing has been hoping to get the troubled jet, which has been grounded since March after two fatal accidents, recertified by at least the US Federal Aviation Administration by the end of this year.

But airlines and others are betting it will not happen until next year.

READ: New United CEO vows to continue ‘proven strategy’.

A Ryanair update to investors said the European low-cost giant had again revised its summer schedule based on receiving just 10 MAX aircraft rather than the 20 expected under its previous revised estimate.

The budget carrier had originally expected to receive its first MAX in the second quarter of 2019 and to have 58 aircraft by the 2020 summer peak.

It said the delivery delay was expected to cut traffic growth for the financial year ending March 31, 2021, from 157 million passengers to 156 million.

The shortfall in MAX aircraft deliveries would also necessitate the closure of two more bases in summer 2020; Nuremberg and Stockholm Skavsta.

It also expected to cut summer capacity at several other existing bases.

“We regret these two further base closures and minor capacity cuts at other bases which are solely due to further delivery delays to our Boeing MAX aircraft,’’  Ryanair DAC chief executive Eddie Wilson said.

“We are continuing to work with Boeing, our people, our unions and our affected airports to minimize these capacity cuts and job losses.”

The Ryanair comments came amid news reports about an October 18 letter from Boeing to the US Securities and Exchange Commission that reiterated earlier comments about a suspension or slowdown in MAX production if the manufacturer’s assumptions about a return to service were not met.

The letter said the company believed it had access to adequate space to store the jets it was continuing to produce but was unable to deliver to customers.

It also said there had been an “insignificant” number of cancellations and reductions to cumulative firm orders in the first half of 2019.

“Due primarily to the size of 737 backlog and management’s ability to mitigate potential impacts by shifting planned customer delivery dates, management does not expect 737 MAX order cancellations due to the grounding to have a material impact to revenues or earnings,’’ it said.