MIAMI – Irish low-cost carrier Ryanair has updated its investors regarding the delays to deliveries of the high-density Boeing 737 MAX 200 that the carrier is expecting to receive once the worldwide grounding of the aircraft type is lifted.
The airline’s CEO, Michael O’Leary gave a lengthy comment, saying that 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.”
“Boeing is hoping that a certification package will be submitted to regulators by September with a return to service shortly thereafter,” he said. “We believe it would be prudent to plan for that date to slip by some months, possibly as late as December.”
The airline’s CEO added that since Ryanair has ordered the Boeing 737 MAX 200s—a high-density variant of the 737 MAX aircraft—these need to be separately certified by the FAA and EASA.
“Ryanair expects that the 737 MAX 200 will be approved for flight services within two months of the MAX return to service,” he said.
O’Leary conceded that delivery delays will extend into 2020, with the months forecasted as January and February providing certification goes to plan.
The carrier can only take delivery of six to eight units every month, which means it is now planning its Summer 2020 scheduled based on the delivery of 30 737 MAX 200s by the end of May 2020—about 58 units less than expected before problems arose with the MAX.
O’Leary did say, however, that “this number could rise, or fall further, depending on when the 737 MAX returns to flight services”.
Ryanair’s growth rate will be slashed from seven percent to three, meaning that full-year traffic growth numbers will be reduced to 157 million passengers, compared to the forecasted 162 million.
“This shortfall in aircraft deliveries will necessitate some base cuts and closures for summer 2020, but also for the winter 2019 schedule,” explained the CEO.
“We are starting a series of discussions with our airports to determine which of Ryanair’s underperforming or loss-making bases should suffer these short term cuts and/or closures from November 2019”, he added.
O’Leary asserted that the carrier is determined to recover on delivery delays over the course of Winter 2020 so then normal growth is restored by Summer 2021.
The Gamechanger? More Like The Namechanger?
Even though Ryanair remains committed to Boeing and its troubled 737 MAX program, the ultra-low-cost-carrier seems to be following the route of IAG by referring to the aircraft as a “737-8” rather than the 737 MAX 8.
It is understood that this naming move was executed by IAG so then the stock value was not hit due to the two incidents of Lion Air Flight 610 and Ethiopian Airlines Flight 302.
Ryanair followed suit, with photos showing its fully painted 737 MAX 200 bearing the name 737-8200.
It remains clear that Ryanair is very willing to take the brunt of the disruptions caused by the grounding of the MAX. However, it could remain speculative that the carrier has no choice in the matter, due to how many it has committed for but also changing to another aircraft type would produce a higher cost.