Ban on 737 max flights sets ryanair back in terms of growth

Ban on 737 max flights sets ryanair back in terms of growth

The ban on boeing’s 737 max medium-haul jet is throwing europe’s biggest low-cost carrier ryanair far behind in its growth plans.

The company will reach the threshold of 200 million passengers per year one to two years later than previously planned, the irish company announced in dublin. Instead of being achieved by the end of march 2024, this goal will not be reached until 2025 or 2026.

Ryanair boss michael o’leary no longer expects the first boeing 737 max to be delivered before september or october 2020. Originally, he wanted to have 58 of the type in the air this summer. The savings the airline expects from the model’s lower kerosene consumption were not expected to be seen for about a year because of the delayed deliveries. For the current fiscal year, however, O’leary is still aiming for a profit in the billions of euros.

The ryanair group operates more than 470 medium-haul jets. Almost all of the aircraft involved are the conventional boeing 737s; only the austrian ryanair subsidiary lauda is flying the rival airbus A320 model. The irish have ordered 135 of the fuel-efficient 737 max, but have not yet received a single aircraft due to the flight ban. After the crash of two aircraft of the type with a total of 346 fatalities, a worldwide grounding of the "max" has been in effect since march 2019. Boeing now expects the ban to be lifted only in mid-2020.

Ryanair management continues to build on the success of the "max" and its lower fuel consumption compared to the previous model, which the aircraft owes to its significantly coarser engines. Marketing chief kenny jacobs is counting on passengers not doubting the jet’s safety after it is recertified. "Some may be afraid. But I think it’s going to be all right," he told the trade portal "aerotelegraph" a few days ago. "If you put a max on the tarmac next to a boeing 737-800, most customers won’t know the difference"."

In the third quarter to the end of december, ryanair flew into the black thanks to unusually strong demand and higher ticket prices. The bottom line was a profit of 88 million euros, compared with a loss of 66 million euros a year earlier. In the winter half-year, when travel is weak, airlines are usually in the red or at best scratching the profit threshold. They generate most of their profits during the peak summer travel season.

While passenger numbers rose six percent to 35.9 million, revenue jumped 21 percent to 1.9 billion euros. Ticket prices alone rose by nine percent, while supplementary fares, such as those for priority boarding and seat selection, increased by 28 percent.

Thanks to better-than-expected business performance, ryanair management had raised its profit forecast at the beginning of january. In the fiscal year ending march, profits are expected to reach 950 million to 1.05 billion euros since then. Previously, O’leary had been looking at 800 to 900 million euros after earnings slumped to 885 million euros the previous year.

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