Ryanair boss slams Boeing executives over 737 MAX deliveries

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May 17, 2022
Ryanair

Ryanair Group chief executive Michael O’Leary has called “Boeing management headless chickens” over late deliveries of the 737 MAX as the airline reports a dramatic improvement in performance.

In an earnings call Monday, Mr O’Leary, said that while the airline is an interested and loyal customer of Boeing with the vast majority of its fleet being Boeing aircraft he criticised the management for late deliveries of the 737 MAX which he referred to as a “game-changer”.

“At the moment, we think the Boeing management is running around like headless chickens. We’re very happy to work with existing management but they need to bloody well improve on what they’ve been doing delivering to us over the last 12 months.”

Ryanair currently operates a fleet of 471 Boeing 737s and has 145 more on order and has taken delivery of 61 Boeing 737-8200 (MAX) aircraft.

The airline reported a full-year loss of €355m (pre-exceptionals) for FY22 ending March 31, compared to a PY loss of €1,015m for the prior year.

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Mr O’Leary said: “FY22 scheduled revenues increased 156% to €2.65bn. While traffic recovered strongly from 27.5m to 97.1m guests, the delayed relaxation of EU Covid-19 travel restrictions until July 2021 (Oct. in the case of the UK Govt.), combined with the damaging impact of the Omicron variant and Russia’s invasion of Ukraine in H2, meant that fares required significant price stimulation.  Ave. fares in FY22 were down 27% to just €27.  Ancillary revenue delivered a solid performance, generating more than €22 per passenger as traffic recovered and guests increasingly chose priority boarding and reserved seating.  Total revenues increased by over 190% to €4.80bn.”

On the environment, Mr O’Leary said: “Every consumer who switches to Ryanair from EU legacy airlines can cut their CO₂ emissions by up to 50% per flight.  Over the coming 5-years we expect our traffic to grow by 50% to 225m p.a.  This growth will be delivered at lower fares but on a fleet of new B737 “Gamechanger” aircraft, which offer 4% more seats, yet burns 16% less fuel and reduce noise emissions by 40%.

He added that the airline had established 15 new bases (Agadir, Billund, Chania, Corfu, Cork, Madeira, Newcastle, Nuremberg, Riga, Stockholm, Venice (Marco-Polo), Venice (Treviso), Turin, Zadar & Zagreb), and had announced 770 new routes over the past year.

“The Covid-19 crisis accelerated the collapse of many European airlines including Flybe, Norwegian, Germanwings, Level, Stobart and material capacity cuts at many others including Alitalia (now ITA), TAP, LOT, SAS, etc.  The tsunami of State Aid from EU Govts. to their insolvent flag carriers (Alitalia, Air France/KLM, Iberia, LOT, Lufthansa, SAS, TAP and others) will distort EU competition and prop up high cost, inefficient, flag carriers for some years.

“Ryanair was one of the very few airlines during the Covid crisis to place significant new aircraft orders, expand our airport partnerships, and secure lower costs so that we can pass on even lower fares on many new routes during the post-Covid recovery.

“Over the past 2 years, Ryanair’s market share has increased markedly across Europe.  Notable examples include Italy where our market share increased from c.30% (pre-Covid) to almost 40% this summer.  Market share in Vienna has jumped from 8% (S.19) to 21% (S.22).  In Budapest (a competitor’s home base) we have gone from 18% to over 30% (and market leadership), Ireland rose from 49% to over 55%, Sweden doubled to 12% and Poland has grown from 25% to 35%.

On the 737-8200 aircraft Mr O’Leary was lyrical. “Up to March 2022, Ryanair has taken delivery of 61 B737-8200 “Gamechanger” aircraft and we hope to increase this to over 70 new aircraft for peak S.22 (more than the 65 previously targeted) to facilitate S.22 recovery and growth opportunities.

“This Summer, our capacity will grow to approx. 115% of S.19 (pre-Covid) levels although we expect to fill these flights with lower fares and at higher fuel costs than pre-Covid.  Our new, fuel-efficient, “Gamechangers” widen the cost gap between Ryanair and all other European airlines for the next decade. Their operational reliability, lower fuel consumption and CO₂ emissions have so far exceeded expectations, with very positive feedback from both passengers and our crews.”