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Ryanair warns of further slips in Boeing deliveries as profits soar

Ryanair

Ryanair is working closely with Boeing bosses on speeding up aircraft deliveries but admits there remains a risk that delivery schedules could further slip.

The European low cost giant gave the update in a full year trading announcement today that reported profits after tax rose 34% to €1.92 billion.

The carrier’s revenue improvement and focus on cost management helped it offset a 32% increase in fuel as hedged oil prices rose from $65bbl in FY23 to $89bbl in FY24.

As of Ryanair’s financial year end in March, the airline was operating 146 Boing 737-8200 ‘Gamechangers’ which it hopes to increase this to 158 by the of July.

However, this is 23 short of its contracted delivery with Boeing, as the US manufacturer continues to battle quality issues and supply chain challenges.

Ryanair said: “We continue to work closely with Boeing CEO (Dave Calhoun), CFO (Brian West) and the new Seattle management team to improve quality and accelerate B737 aircraft deliveries.

“There remains a risk that Boeing deliveries could slip further.  We plan to deliver as much growth as possible for passengers and airport partners in [summer] 2024, although these delays mean more traffic growth will occur in lower yielding H2 than planned.

“To facilitate this growth, we will continue to take delivery of B737s through July, August, and September, and Lauda recently extended 3x A320 op leases by four years to 2028.”

Subject to aircraft deliveries, Ryanair says its order for 300 B737 MAX 10s underpins its aim to grow to 300 million passengers a year by 2034.

The airline reported that demand in Europe this summer is strong and it is poised to operate its largest-ever peak schedule with over 200 new routes and five new bases.

Summer short-haul EU capacity is expected to continue to experience constraints as competitor airlines ground A320 aircraft for P&W engine repairs until 2026 and OEMs struggle to recover their delivery backlogs.

Ryanair urged customers to book Summer travel early “to secure the best airfares before they sell out”.

The airline added in its full year report: “We expect European airline consolidation to continue, with the takeover of ITA (Italy) and Air Europa (Spain) progressing and the sale of TAP (Portugal) next.

“This, in addition to A320 fleet groundings and the large backlog of OEM aircraft deliveries, is likely to constrain capacity growth in Europe for some years.

“These capacity constraints, combined with our significant cost advantage (including FY25 fuel hedge savings of €450m), strong balance sheet, low-cost aircraft orders and industry leading resilience, will (we believe) underpin a decade of profitable growth for Ryanair as we grow to 300 million passengers by FY34.”

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