Ryanair Reports Healthy Profits Despite MAX Grounding

Ryanair has reported healthy profits of €88 million ($98 million) for the third quarter of its 2019 financial year. The profits come despite the Boeing 737 MAX grounding necessitating route and base cuts.

Ryanair, Profits, Boeing 737 MAX
Ryanair has announced profits for Q3 of its 2019 financial year. Photo: Ryanair

Throughout 2019, one of the hot topics for Ryanair has been the 737 MAX. The Irish low-cost carrier had been expecting to enter July with 60 of the aircraft. However, it is now looking as though it will instead have zero.

As a result, the airline has been forced to curtail its expansion plans. However, it seems that despite this, Ryanair’s profits are doing well, up from a loss in the same quarter last year.

Lauda is underperforming

While Ryanair as a whole appears to have had a good quarter, the same cannot be said about its subsidiary Lauda. The airline group said that Lauda experienced strong traffic growth and high load factors. However, due to competition from the Lufthansa group, the subsidiary has much lower fares than the rest of Ryanair’s airlines. Despite this, Lauda will increase its fleet. By summer 2020, the subsidiary should have 38 Airbus A320s, up from 23 currently.

Lauda, Ryanair, Airbus A320, Order
The airline’s subsidiary Lauda has been underperforming. Photo: Lauda

Other subsidiaries appear to be doing well, however. Its Polish Airline, Buzz, now has 32 aircraft, expected to grow to 50 in the next financial year. Meanwhile, Malta Air’s fleet continues to increase, now comprising 71 aircraft according to Planespotters.net.

What about the MAX?

Ryanair has said that it now does not expect to receive the 737 MAX until September or October this year. Interestingly, in its latest release, Ryanair has used the MAX terminology, something which it had been avoiding. The airline added that the delivery of backlogged aircraft will be delayed due to the requirement for MAX simulator training.

However, the airline still believes in the aircraft. Ryanair said that the Boeing 737 MAX “will transform our cost base and our business for the next decade”. This is in part due to its reduced fuel usage, tied with its increased capacity. The airline can carry more passengers for less money.

Ryanair, Boeing 737 MAX, October
Ryanair may not receive its first 737 MAX until October. Photo: Getty Images

Once the airline does take delivery of its new fleet, it expects that it will be able to surpass the 200 million passengers per year boundary. While Ryanair had planned to achieve these numbers in the 2024 financial year. However, this goal has been postponed to the 2025 or 2026 financial year as things currently stand. This delay has been directly attributed to the delay in receiving its new Boeing 737 MAX aircraft.

21% increase in sales

During Q3 of 2019, Ryanair’s sales increased by 21%. The Irish low-cost carrier generated revenue of €1.91 billion ($2.12 billion), up from €1.58 billion ($1.75 billion) last year. This was driven by better than expected holiday season sales of fares which were 9% higher on average. The airline carried a total of 36 million passengers in Q3 of 2019.

What do you make of Ryanair’s latest results, which were announced today? Let us know your thoughts in the comments!