Investment

Boeing 737 Max groundings to hit 2020 results, says Ryanair

Bloomberg/Aidan Crawley

  • share this article

Europe’s biggest discount has the high-capacity of Max 200 version on order, which requires separate certification from US and European regulators.

Tuesday 16, July 2019

Ryanair Holdings became the first airline to scale back growth plans for next summer due to the grounding of Boeing Max jet, a sign the crisis is beginning to impact long-term planning at major carriers, reported Bloomberg.

The Irish company said that with a return date for the Max still uncertain after two fatal crashes, Ryanair is likely to receive barely half of the 58 planes it was expecting for the 2020 peak schedule, adding that the reduction will wipe five million passengers from its full-year tally.

Michael O’Leary, the CEO of Ryanair, said, “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’s announcement shows how a further extension to the Max grounding would have significant fallout for airlines, which draw up future schedules about six months in advance. Air travel is particularly weighted toward the summer season in Europe, with passenger numbers typically surging from the Easter holiday, which starts on April 10 next year.

Other Max customers are already beginning to look at fleet plans for next year in case the grounding drags on. TUI is still considering on which model to replace existing 737s and at some point will need to decide whether to keep the older aircraft in service.

Last week, FlyDubai, which has idled 14 Max planes and has a total of 175 on order, said that the continued grounding of Max had forced it to delay the 1 October launch of flights to Budapest, suggesting that passengers switch to sister company Emirates.

Emirates President Tim Clark himself predicted in June that the model would not return to the skies until next year because the need for national and regional regulators to agree on a common position.

Norwegian Air Shuttle has the greatest current exposure in Europe to the Max crisis, with 18 planes grounded. In April, the airline agreed to postpone the handover of 14 more due in 2020 and 2021 and keep older planes for longer as it narrows in the capacity as part of a plan to resolve a debt crisis.

 

TAGS : Boeing Max jet, Ryanair Holdings, FlyDubai, Michael O’Leary, TUI

print this article