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Ryanair warns Boeing 737 Max delays could stifle growth for two years

Edmund Heaphy
Finance and news reporter
A Ryanair plane in Germany. The airline on Monday bemoaned the impact of delays to Boeing's 737 Max aircraft. Photo: Martin Meissner/AP Photo

Ryanair (RYA.L) on Monday warned that delays in the delivery of Boeing’s (BA) 737 Max aircraft could force the airline to push back its goal of flying 200 million passengers a year by up to two years.

The low-cost carrier had planned to fly that many passengers in its 2024 financial year, but CEO Michael O’Leary said that it would now not happen until 2025, and suggested it may take until 2026.

Ryanair, one of the 737 Max jet’s biggest customers, said on Monday that it now did not expect delivery of the aircraft until September or October 2020.

It hopes to have 55 of the 210 aircraft it has on order flying by summer 2021, a full year later than it had originally anticipated.

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The Boeing 737 Max has been grounded globally since March 2019 following two fatal crashes that killed all passengers on board the aircraft.

The airline again blamed the delays for the closure of a number of loss-making bases, which led to job losses in Spain, Germany, and Sweden.

Ryanair reiterated the extent to which it expected the aircraft to accelerate its growth plans once they are actually delivered, however.

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Citing their more economical fuel usage and greater number of seats, Ryanair said the “gamechanger” 737 Max will “transform” its cost base and business for the next decade.

Ryanair on Monday reported net profit of €88m (£75m) in the three months to the end of December 2019, the third quarter of its financial year.

That was a 230% climb on its €66m loss in the same period in its previous financial year, which was largely driven by a one-off deficit in its Austrian subsidiary Laudamotion and weak winter fares.

Ryanair also raised its guidance for its current financial year and said that it expected full-year pre-tax profits to come in between €950m and €1.05bn, up from a previous forecast of €800m to €900m.

Shares in Ryanair climbed by more than 4.5% on Monday following the trading update.