BRUSSELS – Ryanair (NASDAQ: RYAAY) will have to revise down its passenger traffic estimates for next year because of expected aircraft delivery delays from Boeing (NYSE: BA), the budget airline’s group CEO Michael O’Leary told Reuters on Wednesday.
The move comes as an ongoing strike at Boeing has raised concerns about worsening delays at the planemaker, which has already faced challenges with deliveries for much of this year amid a broader crisis around its safety reputation.
“We were supposed to get 20 deliveries before the end of December. They’ll probably come now in January and February, and that’s fine. We’ll have them in time for next summer. The big issue for Ryanair is we’re due 30 aircraft in March, April, May, and June of next year, and how many of those will we get?” O’Leary said in an interview.
“I think we’re clearly going to walk back our traffic growth for next year because I don’t think we’re going to get all those 30 aircraft,” he added.
The comments from Europe’s biggest budget airline are among the strongest yet on the capacity constraints in the sector as Boeing and Airbus struggle to meet delivery goals amid supply chain challenges.
O’Leary said that in his 30 years in the industry, he had never seen capacity constraints to the current extent.
“We want to avoid next year what we had this year. We had geared up, we crewed up the 50 aircraft, and then we only got 30 …. we were overcrowded, and over-staffed. We took a significant cost penalty this year,” he added.
PRESSURE ON BOEING
The comments come after Emirates President Tim Clark said the Middle Eastern carrier would have “a serious conversation” with Boeing about delivery delays tied to its 777X.
O’Leary said he was having weekly talks with Boeing’s operations chief Stephanie Pope about delivery delays and was set to meet with Boeing CEO Kelly Ortberg in the coming weeks.
He said the talks with the U.S. planemaker were focused on “where we’re getting in terms of the certification … getting the MAX 10 certified,” referring to a new version of Boeing’s top-selling narrow-body jet.
He also praised Boeing’s handling of its labor unrest to date.
“I think the announcement on job cuts is the sensible one to get the unions into some sort of space where they cut a deal,” he said.
Separately, United Airlines (NASDAQ: UAL) CEO Scott Kirby also lauded Boeing (NYSE: BA) for making “right” decisions such as raising cash and securing a new credit line.
Kirby said he spoke to Ortberg on Tuesday and was “encouraged” Boeing was focused on its long-term future.
“We’re going to have fewer airplanes in the near term than we would have been hoping for, but our eye is focused on the long term,” Kirby said on Wednesday.
(Source: ReutersReuters)
