| 15.3°C Dublin

'Nightmare scenario' would see Max jet not flying again

Close

Max factor: Arrival time of new Boeing 737 aircraft the main topic of conversation at the Ryanair AGM in Dublin’s City North Hotel. Pictured are group chief executive Michael O’Leary and deputy chairman Stan McCarthy. Photo: Damien Eagers / INM

Max factor: Arrival time of new Boeing 737 aircraft the main topic of conversation at the Ryanair AGM in Dublin’s City North Hotel. Pictured are group chief executive Michael O’Leary and deputy chairman Stan McCarthy. Photo: Damien Eagers / INM

Max factor: Arrival time of new Boeing 737 aircraft the main topic of conversation at the Ryanair AGM in Dublin’s City North Hotel. Pictured are group chief executive Michael O’Leary and deputy chairman Stan McCarthy. Photo: Damien Eagers / INM

The "nightmare scenario" for Boeing and other airlines is if the troubled Max jet "never flies again", according to Ryanair group chief executive Michael O'Leary.

"It's highly unlikely, but it could be very damaging for air travel," he told shareholders at the airline's annual general meeting yesterday.

Ryanair has 210 of the Boeing Max jets on order and had expected to start receiving deliveries earlier this year.

But following two fatal crashes, the aircraft were grounded all over the world.

It's currently looking like the jets won't be in service until early next year at the earliest.

Mr O'Leary said he doesn't think Ryanair will take its first delivery until "at best" January or February, and that it "could slip further by a couple of months".

But he still expects to have 30 in the Ryanair fleet before next summer.

It had originally expected to have about 60 delivered by this time next year.

The airline has also frozen its pre-delivery payments to Boeing for the Max, he said .

Having 30 of the jets in time for next summer would allow Ryanair to fill the schedule it currently has on sale to customers for the season.

He warned that if Max deliveries run any later than "March, April and May", the carrier would have to take aircraft out of next summer's schedule, which will hit Ryanair's growth.

"If it [the Max] flies in North America this side of Christmas, then I think we're pretty secure we'll be back flying by sometime at the end of February, March," said Mr O'Leary.

Ryanair has predicated its future growth on the Max aircraft, which will provide significant fuel savings and other economies. The delay in the aircraft being recertified has also forced Ryanair to seek up to 700 redundancies.

Mr O'Leary said that if the Max was never to return, it would transform the industry.

Business Newsletter

Read the leading stories from the world of business.

This field is required

"There would be a shortage of aircraft around the world, airfares will rise and it would be a devastating outcome for the industry and for consumers generally," he said.

"Given that it's not dramatic new technology - it's still a 737, and I don't mean to in any way undermine safety issues - it is an aircraft that has had two fatal accidents in a reasonably short period of time, so it does need to be fully addressed," he added.

Mr O'Leary told shareholders that Ryanair doesn't have a 'Plan B' if it didn't ever take delivery of the Max jets.

"If we can't take delivery of those aircraft, we can't grow, and if we can't grow it means inevitably there will be far less growth in European aviation," he predicted.

"The outcome of that is that prices will rise. We will make out like bandits for a few years. Shareholders will see in the short-term, superior returns, dividends, buybacks - all that kind of stuff. But it would be wrong and bad for the medium-term growth of the industry, which fundamentally depends on delivering people low-cost air travel, not high-cost air travel."

The airline boss said that the Max issue is the "biggest operating challenge" that Ryanair is currently facing.

"We are in continuous, on-going dialogue with Boeing," said Mr O'Leary, who added that he also met the European Aviation Safety Agency this week. He also said that Ryanair remains in talks with Boeing about recovering the cost to the carrier of lost traffic and other costs, including it surplus headcount.

However, he said that he remains "confident" about the Max and that aircraft will transform Ryanair's cost base for the next five to 10 years.

He added that Ryanair's senior pilots and chief pilot are "very happy" with the jet.

"I don't think anybody believes in the industry that there's a fundamental safety problem with the aircraft," said Mr O'Leary.

He paid tribute yesterday to Ryanair chairman David Bonderman. He's been chairman since 1996. Yesterday was his last annual general meeting at Ryanair.

Ex-Kerry Group CEO Stan McCarthy takes over the role next year. He's currently deputy chairman at Ryanair.

Mr Bonderman's long tenure has been previously criticised by some shareholders.

Please register or log in with Independent.ie for free access to this article

Already have an account?


Most Watched





Privacy