Ryanair has warned delays to deliveries of Boeing’s 737 Max aircraft will reduce passenger numbers next year and it plans to downsize or close bases at some airports as a result.
Europe’s biggest budget carrier has ordered 135 of the 737 Max models, which remain grounded after two crashes in Indonesia and Ethiopia killed a total of 346 people. Boeing has yet to convince regulators that software modifications are sufficient to ensure the plane’s safety.
Ryanair will reduce the number of flights it operates next summer and now expects to carry 157 million passengers in the year to March 2021, rather than 162 million, cutting its summer 2020 growth rate to 3% from 7%.
The airline said the shortfall in aircraft deliveries will mean “some base cuts and closures” for the winter and next summer, and it has started talking to airports to identify which underperforming or lossmaking bases to shut from November. Ryanair will consult with its staff and unions.
It emerged this week that a 737 Max aircraft due to be delivered to Ryanair had the name Max dropped from the livery, fuelling speculation the manufacturer and airlines will seek to rebrand the troubled plane once it is given the all clear to fly again.
The Ryanair chief executive, Michael O’Leary, said: “Ryanair remains committed to the 737 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.”
The carrier has ordered the larger version with 197 seats, called Max 200, and hopes to receive its first aircraft in January or February 2020. Since it can only take delivery of six to eight new aircraft each month, the carrier is now planning its summer 2020 schedules based on taking up to 30 deliveries up to the end of May, less than the 58 Max aircraft planned for.
O’Leary said: “Ryanair will continue to work with Boeing and EASA [European Aviation Safety Agency] to recover these delivery delays during the winter of 2020 so that we can restore our growth to normal levels in summer 2021.”
Ryanair shares in Dublin rose as much as 1.5% in early trading to €10.30 each, perhaps on relief that the airline is taking action and that the damage appears to be limited.
Other airline shares also rose, on hopes that Ryanair’s capacity cuts will enable rival carriers to raise their fares – bad news for holidaymakers. EasyJet gained 3% and shares in IAG, the owner of British Airways, were up 2.4%.