The delayed deliveries of its first Boeing 737 MAX 200s until early 2020 is really beginning to hurt Irish low-cost giant Ryanair. In an update of its guidance the airline announced on July 16 that its growth will slow down for both 2020 and 2021 and some bases to be closed, all because of the MAX.
Ryanair has 210 MAX 200s on order with Boeing, including 135 firm and 75 on option. Late 2014 it was the launch customer of this 197-seat version, eight seats more than available on the current 737-800. Initially, it ordered 100, adding 10 at the 2017 Paris Air Show and 25 in April 2018.
Ryanair had expected to receive the first five MAX 200s between April and June this year, growing to 42 this Winter and 58 by Spring 2020. That was before the worldwide grounding of the type in March after the crash of the Ethiopian MAX 8, which came within six months of the almost identical Lion Air crash in October 2018.
As we have reported here at length, Boeing has been busy since to correct and modify the MAX software, but Boeing nor the FAA or other regulatory agencies are able and willing to confirm a date when the type will be re-certified again. As new software issues were discovered last month, any date for re-entry into service has continued to slip.
EIS went from April to June/July, then to November. Ryanair said on July 16 it expects the certification package will be presented to the FAA in September, expecting a return to service soon after that. The Dublin-based airline is extra cautious on this, saying in its press release: “We believe it would be prudent to plan for that date to slip by some months, possibly as late as December.”
That’s for the basic MAX 8. Ryanair is aware it will get its first MAX 200s even later: “As Ryanair has ordered the Boeing MAX 200s, which are a variant of the MAX aircraft, these need to be separately certified by the FAA and EASA. Ryanair expects that the MAX200 will be approved for flight services within two months of the MAX return to service.”
Bring on January of February 2020 before the first MAX joins Ryanair, with the airline expecting to receive no more than six to eight aircraft each month after that. Ryanair counts to have some 30 MAX 200s by mid-2020 instead of the original 58.
Revised guidance for 2020/2021
It is here that the airline is feeling the MAX-delays hurting its growth. Having flown 139 million passengers last year, Ryanair was expecting continued growth at 7 percent a year to some 162 million passengers by 2021. The airline has now revised this to 3 percent growth to 157 million passengers and cutting on its planned Winter 2019-2020 and Summer 2020-schedules, as compared to its plans it has no MAX’ for the Winter-period at all and only a limited number after that.
Ryanair expects to close some bases for the upcoming winter as well as for the full year. It is discussing with the unions it has been working with in some countries how this reduced growth pace will affect staff levels and contracts. “We are starting a series of discussions with our airports to determine which of Ryanair’s underperforming or loss-making bases should suffer these short term cuts and/or closures from November 2019.”
The airline hasn’t disclosed how the latest MAX-delays and re-rescheduling will affect its FY2020-results. Last February it said it expected a EUR 750-950 million full-year profit, which was already lower than previously announced due to higher costs and lower fares.
While Ryanair keeps identifying its newest Boeing as the ‘MAX’ in its July 16-press release, its seems the airline will drop the MAX-name on the actual aircraft. Pictures of the first MAX 200 in full livery in Renton emerged last weekend and show ‘737-8200’ on the nose, a designation used by Boeing in earlier documents to identify the higher-capacity version of the MAX 8.
If this is an indication that Boeing will drop the MAX-name altogether remains to be seen. Note that International Airlines Groups announced a Letter of Intent for 200 Boeing 8s and 10s at the Paris Air Show.
