Key Points:
- Ryanair CEO Michael O’Leary warns of a potential 10% fare increase this summer due to delayed Boeing plane deliveries.
- Originally expected to receive 57 Boeing 737 Max 8200 aircraft, Ryanair now estimates only 40-45 planes may arrive in time for the summer season.
- Boeing’s production delays and safety scrutiny contribute to industry-wide capacity constraints.
- Ryanair may revise its downward passenger forecast for the year due to reduced aircraft availability.
Michael O’Leary, the CEO of Ryanair, has cautioned that holidaymakers can expect higher fares this summer due to delayed deliveries of new Boeing planes. The tardiness in receiving the aircraft is anticipated to limit passenger capacity, resulting in potentially up to a 10% increase in ticket prices for Ryanair flights.
Originally scheduled for delivery by March, Ryanair had expected to receive 57 Boeing 737 Max 8200 aircraft, but the airline now estimates that only 40-45 planes may arrive in time for the summer season. Boeing’s production delays have been compounded by heightened scrutiny from regulators, including the Federal Aviation Administration, following safety incidents involving its jets.
Despite seeking compensation for the delays, Ryanair primarily focuses on ensuring the timely delivery of planes to mitigate the impact on its operations. O’Leary emphasized that the airline’s hedge on fuel costs would temper the fare increase compared to the steep 17% rise in 2023.
The constrained capacity is not unique to Ryanair, as other airlines also face similar challenges due to aircraft unavailability. Issues with Pratt & Whitney engines have grounded Airbus planes used by carriers like Wizz Air, exacerbating the industry-wide capacity constraints.
O’Leary indicated that the original passenger forecast for Ryanair for the year ending March 2025 might need to be revised downward due to the reduced aircraft availability. He said, “With less aircraft, maybe we’ll have to bring that 205 million down towards 200 million passengers.”
Lucy Coutts, an investment director, highlighted that Boeing’s delays are expected to result in 9,000 fewer seats available this summer, impacting airlines’ operations and potentially leading to fare hikes. While Ryanair’s projected fare increase of 10% is higher than the industry average of 3-7%, it reflects the airline’s need to offset costs arising from the delays.
Commenting on Boeing’s management, O’Leary expressed confusion over the messaging from the company and questioned the decision to remove the head of the 737 Max program. He advocated for clearer leadership to address the production challenges and ensure timely deliveries.
In response, Boeing expressed regret over the impact of delays on its customers, including Ryanair, and reassured stakeholders of its commitment to addressing quality and delivery performance issues.
