Ryanair is expecting delivery of its first Boeing MAX 200s to slip until March or April at the earliest, with more delays not ruled out. This means the Irish low-cost airline will reap the benefits from operating the more fuel-efficient type only during its FY21 instead of the current FY20, Ryanair said on November 4 during its HY1-20 results conference.
CEO Michael O’Leary is optimistic the MAX will return to service in North America before this Christmas but that regulatory approval in Europe will take a few more weeks or even months.
At its Q1 presentation, O’Leary hoped for delivery of the first MAX 200s by February/March, with 30 to be delivered this fiscal year. This has been revised to just 20 aircraft. The original plan included 58 deliveries until the Summer of 2020. As previously announced, the delay in MAX-deliveries forces Ryanair to cut back on staff and the number of bases for the Winter 2019/2020 schedule without disclosing the numbers.
The delays hurt Ryanair’s expansion strategy, which for FY21 now includes to peak at 157 million passengers compared to the original 162 million. For FY20, the airline expects 153 million passengers and a profit after tax of EUR 800-950 million mainly due to higher fuel costs.
In HY1, profit after tax was flat at EUR 1.15 billion despite 11 percent higher revenues at EUR 5.39 billion. Higher staff costs and 22 percent more expensive fuel were instrumental in this result. Ryanair has hedged 63 percent of its fuel costs for FY21.
Lauda lossmaking in FY20
O’Leary expects its Austrian subsidiary Lauda to end FY20 deeper in the red than expected as it feels the competition at its Vienna hub, which has seen an invasion by low-cost airlines in recent months. Cost-cutting measures are being executed, as well as plans to grow ancillary revenues. Lauda will grow its fleet from the current 23 to 38 Airbus A320ceo’s by next Summer and will make it the second airline in Vienna behind Austrian Airlines. These aircraft will be sourced at favorable lease rates from Thomas Cook and Adria, two airlines that have collapsed over the last two months. Their bankruptcies have resulted in a flow of cockpit and cabin crew becoming available to other airlines. Lauda is expected to breakeven by Q1 FY21.
Malta Air has been operational since June and is replacing Ryanair at its Valetta-base. Its Polish subsidiary Buzz has been operating 24 Boeing 737-800s from six hubs in its second Summer of operations, with seven aircraft dedicated to charter operations. Ryanair DAC opened five new bases at Marseille, Bordeaux, Toulouse, Southend, and Berlin.
