Ryanair’s CEO, Michael O’Leary, has alerted holidaymakers to anticipate increased fares this summer, attributing the surge to delayed deliveries of new Boeing planes. O’Leary expressed concern that the tardy arrival of aircraft will limit passenger capacity, potentially resulting in up to a 10% rise in ticket prices for travelers during the peak season.
Originally expecting 57 Boeing 737 Max 8200s by March, Ryanair now anticipates only 40-45 of these aircraft to be available for the summer season. The delay stems from heightened scrutiny following an incident in January involving a malfunction on an Alaska Airlines flight, prompting the Federal Aviation Administration to intensify inspections of Boeing.
Despite potential compensation from Boeing, Ryanair remains primarily focused on securing timely plane deliveries. Concerns about Boeing’s quality control procedures have further compounded production delays, affecting not only this craft but also other carriers grappling with similar capacity constraints.
Complicating matters, issues with Pratt & Whitney engines have grounded Airbus planes operated by carriers like Wizz Air. O’Leary emphasized that a “higher fare environment across Europe” should be expected this summer due to these industry-wide challenges.
While the craft initially projected carrying 205 million passengers by March 2025, O’Leary hinted at a potential revision downwards, acknowledging the impact of reduced aircraft availability on passenger volume.
Ryanair’s fare hike exceeds
Source: Daily Mail
Lucy Coutts, investment director at JM Finn, highlighted Boeing’s acknowledgment of 9,000 fewer available seats this summer due to production delays. She noted that Ryanair’s fare hikes of 10% exceeded the industry average of 3-7%, attributing the difference to Ryanair’s low-cost carrier model.
O’Leary’s sentiments regarding Boeing’s management echo a sense of “confusion,” emphasizing the need for clearer leadership amidst quality control concerns. While O’Leary has supported Boeing’s top management, he has criticized the company’s execution of quality standards, particularly in meeting delivery timelines.
Regarding Boeing’s recent leadership changes, O’Leary questioned the efficacy of replacing the head of the 737 Max program while simultaneously appointing a new president for quality control. He advocated for a single individual to oversee daily operations, underscoring the importance of timely aircraft deliveries for Ryanair’s operations.
In response, Boeing expressed regret over the impact of delays on the air craft and emphasized their commitment to addressing concerns and improving aircraft quality and delivery performance.
In conclusion, Ryanair’s warning of summer fare hikes underscores the challenges posed by delayed Boeing plane deliveries and industry-wide capacity constraints. While the aviation sector grapples with these issues, passengers may experience higher ticket prices and potential disruptions to travel plans in the coming months. In January, Ryanair criticized several online travel agents, such as Booking.com, Kiwi, and Kayak, for abruptly removing its flights from their platforms. As Europe’s largest airline in terms of passenger volume, Ryanair has engaged in a protracted dispute with online booking platforms.
The conflict escalated when Ryanair initiated legal proceedings in the United States against Booking Holdings, the parent company of Booking.com, Kayak, Agoda, and Priceline, following an Irish High Court decision that prohibited Flightbox, a screenscraper, from collecting Ryanair flight data for online travel agents.
Online Agents Row
Source: Watford
The removal of Ryanair flights from these websites is expected to temporarily increase the number of unoccupied seats on Ryanair planes. In response, the airline reduced its direct booking prices to mitigate the impact of the situation. The airline’s CFO, Neil Sorahan, informed Reuters that the removal from certain online agents’ platforms would have a temporary impact, which was already starting to diminish.
Despite this development, Ryanair’s after-tax earnings are projected to surpass its previous record annual after-tax profit of €1.45 billion in 2018. This positive forecast follows a surge in profits in November, driven by increased ticket prices. Ryanair reported a notable 11% increase in passenger numbers to a record 105.4 million during the six months ending in September, despite a 24% rise in average fares. However, the airline cautioned that potential delays in receiving new Boeing 737 Max 8 aircraft, known for their fuel efficiency, could impact future profits. Additionally, Ryanair highlighted that its full-year performance remains vulnerable to unexpected adverse events, citing examples such as conflicts like the Ukraine war or the Israel-Hamas conflict.
