The Ryanair Group has released its first half of 2019 earnings statement, which pointed to a net profit of €1.15bn and a healthy set of statistics. However, the sunny outlook is mired by one big dark cloud, and it’s shaped like a 737 MAX. Now, the airline doesn’t think it will receive more than 20 over the course of 2020, rather than the 58 expected, and isn’t planning to have any at all before March.
It’s been one heck of a year for Ryanair. With the fourth airline, Malta Air, joining the group and no less than five new bases opening (Bordeaux, Marseilles, Toulouse, Southend and Berlin), things have been moving swiftly forward for the Irish group.
However, not everything has been such a success. With the 737 MAX still grounded, Ryanair’s capacity has been severely impacted, with the airline forced to keep more of its older aircraft as a result. Now, it seems the carrier does not expect any MAX until well into 2020, and is not expecting to receive anything like its full quota in time for next summer.
Just 20 737 MAX expected in 2020
In Ryanair’s earnings call release, the company detailed the outlook for the 737 MAX. Ryanair has some
“We expect to receive only 20 MAX-200s (previously 58) in time for S.20 which has cut our S.20 growth rate from 7% to 3% (162m to 157m guests in FY21).”
Ryanair’s version of the 737 MAX 8 will be the densest configuration we’ve seen to date. Dubbed the 737-8-200, the aircraft can seat as many as 200 passengers, although Ryanair’s seat maps indicate that the airline is going for 197 seats.
Although the interior has yet to be revealed in all its knee crushing glory, its thought that this will be achieved by reducing seat pitch to just 28” and shrinking both galley and toilet space.
No MAX before the next financial year?
The Group’s earnings release detailed an update on the planned introduction of the 737 MAX to Ryanair’s fleet which, of course, should have happened in the first half of this year. Now, they say they don’t expect to receive any MAX aircraft until potentially next financial year.
In the earnings release, Ryanair said,
“Delivery of the Group’s first B737-MAX-200 aircraft has been repeatedly delayed from Q2 2019. We now expect our first MAX aircraft to deliver in March/April 2020 at the earliest (subject to EASA approval). The risk of further delay is rising.”
The idea that the MAX will not be back in service until March or April is fairly consistent with the thinking of Ryanair’s counterparts on the other side of the Atlantic. While Boeing still expects the type to be certified to fly in the US by the end of the year, US operators understand d there will be some time lag between getting the green light to fly and actually having the aircraft in service.
As such, US operators such as Southwest have pulled the type from schedules until February 2020, in order to better manage customer expectations and forward-looking scheduling.
For Ryanair, with EASA also needing to approve the aircraft, several weeks can be easily added onto this timeline. For the Irish carrier, it’s not a case of taking the aircraft out of mothballs either; rather, they will be somewhat at the mercy of Boeing in terms of when and how many can be delivered to the carrier. Boeing will undoubtedly be under great pressure from all sides to get these MAX delivered, so Ryanair will have to hold its place in the queue.
Still confident on the ‘gamechanger’
Despite all the capacity problems that have been brought about by the grounding of the MAX, Ryanair remains positive about the outlook for the future of the type. In the release, the airline commented,
“We remain confident that these “gamechanger” aircraft (which have 4% more seats, but burn 16% less fuel) when delivered will transform our cost base and our business for the next decade. Due to these delivery delays, we will not see any of these expected cost savings delivered until FY21.”