Ryanair growth to stall as MAX jets delayed until at least March

[DUBLIN] Ryanair on Monday announced a further two-month delay to the start of its Boeing MAX 737 deliveries and warned it may have none of the jets to fly next summer, which would freeze growth of one of Europe's fastest growing airlines.

In July the Irish budget carrier said it expected to be flying 30 737 MAX next summer and its first delivery in January.

It is one of Boeing's biggest customers for the grounded plane with 210 on order.

CEO Michael O'Leary said the company had lowered its estimate to 20 planes by next summer and added "there is a real risk of none" in a video presentation following the airline's mid-year results.

"The risk of further delay is rising," he added, saying he did not expect Boeing to achieve its target of getting the plane back in service in the United States by Christmas.

US carriers do not expect to fly the MAX until 2020, according to their schedules, as they wait for regulators to end a worldwide grounding that followed two deadly crashes.

Ryanair faces longer delays as it has to wait for approval by the European Union Aviation Safety Agency (EASA) and specific certification for Ryanair's MAX200 model, each of which are likely to cause several weeks of additional delay.

Ryanair now expects to fly 157 million passengers in the year to March 31, 2021, a growth rate of just 2.6 per cent from its target of 153 million in its current financial year, its slowest growth rate in seven years.

Further delays could reduce to zero growth at an airline that on average has seen annual passenger numbers rise by 10 per cent since 2014.

Still, chief financial officer Neil Sorahan said there was "no risk at all" that the airline would fail to meet its target of flying 200 million passengers per year by March 2024.

The airline reported post-tax profit of 1.15 billion euros (S$1.74 billion) for the six months from April to September, its most profitable part of the year, in line with last year and ahead of a forecast of 1.08 billion euros in a company-supplied poll of analysts.

It now expects a full-year profit of 800-900 million euros versus an earlier forecast of 750-950 million euros and a consensus analyst forecast of 836 million euros.

Ryanair said it expected modest growth in average fares this winter. For the year, it expects strong sales of optional extras to raise revenue per passenger up by 2-3 per cent.

It also warned that losses at its Austrian subsidiary Laudamotion would be higher than expected due to overcapacity in Austria and Germany.

"Q2 was ahead of consensus, with average fares not as bad as feared," Liberum analyst Gerald Khoo said in a note, adding that the balance of risks to next year "is modestly on the downside given further MAX delivery delays".

REUTERS