Ryanair to cut services as Boeing 737 MAX crisis hits fleet
As the industry battles higher fuel bills and weak fares, Ryanair blames aircraft delivery woes for a decision to slash flights.
Tuesday 16 July 2019 12:36, UK
Ryanair says delays to deliveries of the crisis-hit Boeing 737 MAX means it must scale back some of its services.
The no-frills carrier said it was identifying loss-making or poorly-performing bases ahead of the looming winter season and summer 2020 for short-term cuts or even closures from November - adding it would consult staff and unions.
It was unclear how many people would be affected and further details were promised following the publication of first quarter results at the end of the month.
But Ryanair did signal it would be seeking compensation from Boeing.
All 737 MAX planes were grounded worldwide by aviation authorities after two crashes involving the 737 MAX 8 version of the aircraft.
A total of 189 people were killed on an Indonesian Lion Air flight last October before 157 died aboard an Ethiopian Airlines flight in March.
Both have been linked to flight control software.
Ryanair was not using the planes at the time of the accidents but has 135 of them on order.
It was widely reported on Monday that one of two Ryanair 737 MAX aircraft - pictured at Boeing's Seattle HQ - had been painted with the designation '737-8200' rather than '737 MAX'.
The livery difference was yet to be explained.
Ryanair chief executive Michael O'Leary said: "Ryanair remains committed to the B737 MAX aircraft, and now expects that it will return to flying service before the end of 2019, however the exact date of this return remains uncertain.
"Boeing is hoping that a certification package will be submitted to regulators by September with a return to service shortly thereafter.
"We believe it would be prudent to plan for that date to slip by some months, possibly as late as December."
Ryanair said it had ordered Boeing MAX 200s - a variant of the MAX aircraft, which needed to be separately certified by US and European regulators.
It said it was planning to receive its first order between January and February but monthly delivery limitations mean it has to trim its capacity expectations.
It cut its summer 2020 growth rate forecast from 7% to 3%, with full year traffic growth for the year to March 2021 down to 157 million passengers from 162 million.
Mr O'Leary added: "We are starting a series of discussions with our airports to determine which of Ryanair's under-performing or loss-making bases should suffer these short term cuts and/or closures from November 2019.
"We will also be consulting with our people and our unions in planning and implementing these base cuts and closures, which are directly caused by the B737 MAX delivery delays to the B737 MAX programme."
The headwinds for Ryanair over the new aircraft delays coincide with a period of wider turbulence for the industry - as stiff competition has brought down fares at a time of higher fuel bills - culminating in some rivals, including WOW, going to the wall.
Ryanair, Europe's largest budget carrier, reported in May a 29% dip in annual profits and warned of flat earnings for its current financial year that could yet feel a Brexit impact.
Shares - down more than 5% in the year to date - were 1.5% up in early deals on Tuesday.