Business Irish

Friday 15 November 2019

Ryanair shares take off despite 737 Max delay concerns

Update: Ryanair CEO Michael O’Leary hopes to see rising revenue per passenger
Update: Ryanair CEO Michael O’Leary hopes to see rising revenue per passenger
John Mulligan

John Mulligan

THE risk of further delays to Ryanair's Boeing 737 Max delivery schedule is "rising", and the carrier expects to receive just 20 of the jets in time for next summer, compared with the 58 it had anticipated.

But group CEO Michael O'Leary has also conceded that it might have none of the troubled aircraft in its fleet next year, as delays in reintroducing the model around the world persist.

Shares in the airline group hit their highest level in more than a year yesterday, however, soaring almost 10pc at one stage, as Ryanair's second-quarter performance beat expectations.

It said its profits in the first half of its financial year were flat, at €1.15bn, even as revenue jumped 11pc to €5.39bn.

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Its ticket sales for the six months to the end of September were 5pc higher, at €3.74bn, but its average air fare was 5pc lower.

It blamed weak demand in the UK, and over-capacity in Germany and Austria, for the depressed fares.

The fare decline was slightly better than the 6pc fall Ryanair had previously predicted, however.

Ancillary revenue climbed 28pc to €1.65bn, with Ryanair benefiting as more flyers paid for priority boarding and seat selection.

Mr O'Leary said the airline expected revenue per passenger to rise by between 2pc and 3pc during the remainder of the financial year.

Costs excluding fuel were 2pc higher during the first half of the year.

Mr O'Leary said that was due to the annualisation of pilot pay increases and higher crewing ratios because of the "effective drying up" of pilot resignations over the past 12 months.

"We also have increased maintenance [costs]," he said.

"We're keeping more of our older aircraft into next year because of the delay in the Max deliveries."

Ryanair will carry fewer passengers next summer and expects to carry 157 million in the current financial year, versus the 162 million it had previously expected.

"We may have to cut that again, but frankly, there is no point in keeping on changing the number until we get more certainty," said Mr O'Leary in relation to the return of the Max to service.

The airline chief also said Ryanair was "disappointed" with the recent determination from the Commission for Aviation Regulation, which will see the maximum passenger charge that can be levied by the DAA at Dublin Airport fall to an average of €7.87 in the five years between 2020 and 2024.

The DAA has criticised the body's decision, calling it a "disaster".

Irish Independent

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