Ryanair expects first Max flights this winter
Ryanair hopes to have its first five Boeing 737 Max jets operating during the winter 2019-20 season, according to its chief executive Michael O'Leary.
The Irish low-cost carrier has a firm order of 135 Boeing 737 Max 200s, with options for 75 more. It initially expected to receive its first five in spring 2019. However, delivery is now expected in October following the worldwide grounding of the Max type.
“When it returns to service we expect to delay our first delivery of five aircraft probably to October so that we will be operating with the winter schedule,” O'Leary told investors.
“We then have 42 aircraft to take over the winter. We think they will be slightly backed up, but we would expect to have all 48 aircraft in service for summer 2020, delivering a better customer experience and lower cost, enabling us to pass on lower air fares.”
In a statement, Ryanair stressed that it has “utmost confidence” in the Max jets. O'Leary added that he expects the aircraft will be certified to return to flying in North America “probably in July or August”, while in Europe it will be “a month or two later than that”.
The Ryanair boss updated investors on the airline’s Max fleet schedule as it reported its financial results for the year to 31 March 2019. Full year after tax profit, excluding Lauda, fell by 29 per cent year-on-year to €1.02bn. Revenue rose 6 per cent to €7.6bn.
The LCC said traffic grew 9 percent to 142 million passengers, including Laudation, but average fare fell by 6 percent to €37.
During summer 2018 the group launched Ryanair Sun, which has since been rebranded Buzz, with a Polish AOC. It has taken over Ryanair’s scheduled bases in Poland.
“Buzz started off last year with five aircraft in the fleet, primarily charters, and that has now increased to seven charters this summer,” said Ryanair chief financial officer Neil Sorahan.
“Last winter they took on scheduled flying for the Ryanair group and have 25 aircraft in the fleet. That will easily double over the next few years.”
In December 2018, Lauda became a wholly owned subsidiary of the group. The Austrian carrier flew three million passengers in its first year of operations to March 2019, but suffered exceptional start-up losses of €139.5m.
It enters its second year with a larger fleet of 23 A320 aircraft and a target of six million passengers in the 12 months to 31 March 2020. The carrier has also signed agreements to grow its fleet to 35 A320 aircraft for summer 2020.
“Lauda had a very difficult first year - a chaotic kind of start through summer 2018 - so they have suffered exceptional year one start-up losses of €140m,” O'Leary said.
“Already we see our way through in year two in what is a very weak environment in the German and Spanish markets in particular, where Lauda is one of the main players. The losses will be significantly and substantially reduced.”
Sorahan said that about 40 percent growth across the group would come in its major markets of Italy, Spain and the UK. He added that France would also be a significant contributor following the opening of its new bases as Bordeaux and Marseille, with a base at Toulouse to open in October.
“Of course there’s new markets being added all the time; the likes of the Ukraine, Turkey, Bosnia and Herzegovina and we’re doing a lot in Jordan and Israel as well,” Sorahan said. “There continues to be lots of opportunities for Ryanair’s growth over the coming years.”
However, O'Leary stressed that the group is unlikely to significantly expand its presence in Scandinavia.
“Scandinavia is a very difficult market at the moment, particularly with the Swedish and Norwegian governments hiking unjustified aviation taxes,” he said.
“We think it’s inevitable that Norwegian will either fail or be sold this winter. That may lead to some opportunities up there, but I would be a reluctant entrant to the Scandinavian market at the moment where airports costs are high and governments are vindictively taxing air travel.”
According to data from OAG Schedules Analyser, Ryanair’s overall capacity (including Lauda) increased 9 percent during its latest financial year to 149.0 million available seats.
During this summer season Ryanair has 96.1 million seats on offer, a rise of 3.2 percent compared with summer 2018, while Lauda has 4.2 million available, compared with 3.1 million in summer 2018.