HomeAir LineBoeing is the only cloud in Ryanair's sky

Boeing is the only cloud in Ryanair’s sky

The risk of delays seems manageable, but the manufacturer will continue to cast shadows for some time

Ryanair Boeing 737-8AS, landing at Riga International Airport (Lithuania).INTS KALNINS (REUTERS)

Ryanair continues its post-Covid climb. On Monday it announced that after-tax profit for the year ending in March would be just under 2 billion, slightly less than expected, but more than its previous record of 1.5 billion, achieved six years ago. But the concerns of Boeing, one of its main suppliers, are a dark cloud on the horizon.

Although the summer season is always difficult to estimate, CEO Michael O’Leary said expected bookings are 5% higher than a year ago. That lends credence to the idea that even cash-strapped consumers are reluctant to cut back on overseas getaways. Ryanair has risen 75% on the stock market since January 2019, outperforming its peers.

But Boeing is a potential source of turbulence. Ryanair’s fleet of almost 600 aircraft is almost entirely made up of aircraft from the US giant, while EasyJet and Wizz Air use Airbus aircraft. Last week, the US Federal Aviation Administration (FAA) announced that it would not allow Boeing to expand production of its MAX line, after multiple and serious incidents involving these models.

At first glance, the risk for Ryanair is manageable. The FAA clarified that Boeing could continue producing at the current rate, and the Irish airline said it had assurances that its key supplier would not further delay deliveries this summer or next. O’Leary still expects to receive about 50 new planes this summer. Even if that doesn’t happen, it’s less than 10% of their fleet.

But Boeing’s prolonged problems could further delay the certification and delivery of the new MAX 10, for which Ryanair placed a mammoth order of 300 aircraft in May. Delivery is planned in phases between 2027 and 2033, which would significantly increase Ryanair’s capacity. Although rival United Airlines is exploring buying Airbus planes to fill the possible void left by the MAX 10, change is complicated.

O’Leary is optimistic; He is confident that the MAX 10 will be certified by the end of the year and can fly in 2025, and would even accept deliveries rejected by its US rivals. Still, Boeing is likely to continue casting shadows for some time.

The authors are columnists for Reuters Breakingviews. The opinions are yours. The translation, of Carlos Gomez Belowit is the responsibility of Five days

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