Ryanair Facing Further Boeing Delivery Delays

Irish LCC Ryanair has cut its full-year passenger forecast from 185 million to 183.5 million, following fresh Boeing 737-8200 delays that will leave it seven or eight aircraft short this winter, along with a three-month lag in aircraft arrivals for summer 2024.

Ryanair had been planning to have all its new aircraft for the summer 2024 season in place by April 2024, but this timeline has now been pushed back by three months to June 2024.

“Boeing has suffered multiple supply chain challenges, which have caused repeated delivery delays. We had hoped to be out of these at the end of July [2023], but already they’ve notified us of delivery delays in the autumn deliveries,” Ryanair Group CEO Michael O’Leary told attendees of a fiscal 2024 first quarter (Q1) earnings call on July 24. “We’re working closely with Spirit in Wichita, and with Boeing, to try to [have them] give us the most accurate figure we have on the fleet.”

O’Leary said this latest round of delays has been caused by strikes at Spirit AeroSystems and the June collapse of a bridge over the Yellowstone River used by Spirit for transporting fuselages by rail to Boeing. The subsequent delays mean Ryanair will need to cancel flights in September and October.

“As we start gearing up for maintenance, we’ll be short some aircraft and we’ll have to pare back some schedules,” he said. “We’re going to be seven or eight aircraft short.”

This summer, Ryanair has already experienced significant disruption from late deliveries. Boeing is now on track to deliver 51 aircraft for by July 31, but they were meant to have been in place by April 2023. At one point, O’Leary thought he might only have 35 737-8200s joining the fleet for the 2023 peak summer season. He estimated that these delays cost Ryanair around 300,000-400,000 passengers in April, May and June; 300,000 in July; and 200,000 in August. And now Ryanair is now having to “shave off” further passengers in September and October.

By the end of its fiscal Q1, on June 30, Ryanair Group—which includes mainline Ryanair, Ryanair UK, Buzz, Malta Air and Lauda Europe—operated a fleet of 558 737s, including 119 737-8200s; Lauda operates 28 Airbus A320s. The MAX fleet is expected to grow to 124 aircraft by the end of July.

However, there is a strong sense of déjà vu for summer 2024. Ryanair’s 737-8200 deliveries that were originally planned for February, March and April 2024 have now been pushed back to April, May and June 2024. O’Leary has been very vocal about the delays in the past, but he appeared surprisingly calm about these changes.

“We have already agreed with Boeing that some deliveries will be delayed,” he said. “Our last delivery for summer 2024, which was to have been in April 2024, will now be delayed to June 2024. But hopefully we can take all those aircraft by the end of June 2024 and therefore benefit from that continuing growth to the peak months of July and August [2024].”

He added that this change has caused Ryanair to revise its full-year passenger outlook down from 185 million to 183.5 million. “It’s not a significant movement, but it is a movement,” he said.

Ryanair is aiming to grow its passenger numbers to 300 million by the end of fiscal 2034. To cater for this growth, Ryanair announced a long-awaited order for 150 firm 737-10s, along with 150 options, at the 2023 Paris Air Show in June. This order, which is scheduled to be delivered between 2027 and 2033, will be put to a Ryanair shareholder vote on Sept. 14.

“We think about half of this order will be used to replace older NGs, which will start hitting 24, 25 [years] in 2028 and 2029. But half of the order will allow us to sustain controlled—although more modest—growth into the early 2030s than we have delivered over the past 10 or 15 years,” O’Leary said.

The 228-seat 737-10s will hold 39 more passengers than the 189-seat 737NGs, while delivering 20% lower operating costs. Ryanair will release more details about its 737-10 plans during a capital markets day in the first week of September. “The purpose of that day is to take everybody through the MAX 10 aircraft order [and do] a detailed drill down into the very exciting growth opportunities we have all over Europe, and in those countries close to Europe, for the next decade,” O’ Leary said.

Reflecting on overall airframer trends, O’ Leary is seeing a shortage of new and leased aircraft that he expects to “run on until the end of this decade, out to 2030.”

“There’s a large backlog of aircraft deliveries, and we believe that’s going to continue to constrain capacity growth in Europe for at least the next three or four years,” he said.