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Saturday, December 28, 2024

Ryanair warns of 10% fare rise as new planes delayed

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Ryanair passenger planeImage source, Getty Images

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By Katy Austin

Transport correspondent

The boss of Ryanair has said holidaymakers will face higher fares this summer due to new Boeing planes being delivered late.

Chief executive Michael O’Leary said the delayed delivery of the planes will constrain capacity for passengers.

He said that Ryanair’s ticket prices could be up to 10% more expensive this summer as a result.

Ryanair hopes to get some compensation, but is focused on getting planes delivered, Mr O’Leary added.

He said that a delivery of 57 Boeing 737 Max 8200’s was due by March, but the firm thinks only 40-45 may arrive in time for the summer season.

Boeing has been facing scrutiny since an incident in January when a piece of one of its jets blew out during a passenger flight. The Alaska Airline passenger flight did not lead to serious injuries but forced an emergency landing.

As a result, Mr O’Leary said, the US manufacturer had the US regulator, the Federal Aviation Administration, “crawling all over them”.

Major concerns have been raised about quality control for new Boeing aircraft, sparking a slowdown in production speed.

Mr O’Leary said costs saved through hedging on fuel would mean that Ryanair’s fare increase would not be as steep as the 17% rise seen in 2023.

Some other airlines also have capacity constraints caused by aircraft not being available, he added.

A problem with Pratt & Whitney engines, for example, has grounded a number of Airbus planes used by carriers such as Wizz Air.

Mr O’Leary told reporters that there would be a “higher fare environment across Europe” this summer.

Ryanair’s original forecast for the year to the end of March 2025 was that it would carry 205 million passengers, up from 183.5 million in the 12 months before.

Speaking at the firm’s Dublin headquarters, Mr O’Leary said: “With less aircraft, maybe we’ll have to bring that 205 million down towards 200 million passengers.”

“If capacity was growing, I think fares would be falling,” he added.

Lucy Coutts, investment director at JM Finn, told the BBC’s Today programme: “Boeing itself has said there are going to be 9,000 fewer seats this summer available because of the delays at the company.

“Ryanair is a low-cost carrier and so its hikes of 10% are a little bit higher than the average at 3-7% but it is because it is coming from a low base.”

Discussing the issues that have engulfed the US plane maker Boeing, Mr O’Leary described the message he was currently getting from the firm as “confusion”.

The boss of the carrier has repeatedly backed Boeing’s top management, but criticised the plane maker’s quality control standards.

He does not think the removal of the 737 Max programme’s boss Ed Clark was the right move, arguing that having both a replacement for Mr Clark and a new president for quality did not make sense.

Ryanair, he said, wanted one person in charge who was monitoring the situation daily, having previously said their products were “great aircraft, it’s just that they’re not making them on time or delivering them in time”.

A spokesperson for Boeing said: “We are communicating with customers that some delivery schedules may change as we take the necessary time to make sure that every airplane we deliver is high quality and meets all customer and regulatory requirements.

They added that they “deeply regret the impact this is having on our valued customer Ryanair”.

“We’re working to address their concerns and taking action on a comprehensive plan to strengthen 737 quality and delivery performance.”

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