Ryanair boss warns Boeing 737 Max crisis could lead to job cuts

The Ryanair boss, Michael O’Leary, has said he cannot rule out making redundancies if the Boeing 737 Max stays grounded for longer than expected while investigations continue into two fatal crashes involving the aircraft.

He also warned that Ryanair could scrap UK domestic routes in the event of a no-deal Brexit.

Speaking as the budget airline’s first-quarter profits slumped by 24%, O’Leary bemoaned the impact of delays in the return to service of the 737 Max, a key component of Ryanair’s strategy to arrest the recent decline in its financial performance.

Ryanair has 135 of the 737 Max models on order, the first five of which are due for delivery in the autumn, but they will not be able to fly until regulators have declared the plane safe.

O’Leary warned that Ryanair may not have any of the planes ready by next summer unless Boeing “gets its shit together” in making upgrades required for regulators to allow the plane to fly.

The grounding of the global fleet of 737 Max aircraft has already taken its toll on Ryanair, forcing the airline to halve its growth targets for next year as it scrapped 30,000 planned flights and warned it could close bases at airports.

O’Leary warned that redundancies could not be ruled out as a result.

At least one Boeing 737 Max that was due to be delivered to Ryanair has had the name Max dropped from the livery, fuelling speculation that the manufacturer and airlines will seek to rebrand the troubled plane.

O’Leary issued his warning on jobs as the airline reported a 24% drop in quarterly profits, with its 737 woes compounded by price wars in several European markets.

Average summer fares at Europe’s largest low-cost carrier will likely fall by 6% compared with last year, as airlines cut prices to stimulate demand, particularly in Germany and the United Kingdom, the airline said.

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That helped push pretax profit down to €262m (£236m) for the three months to June 30.

But the company stuck to its annual profit target of between €750m and €950m as passengers continued to spend on onboard extras, which include food, perfume and scratchcards.

Shares in the airline were up 1.5% by mid-morning, having almost halved in value in two years as it grappled with overcapacity, pilot strikes, Brexit uncertainty and the 737 delays.


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