Ryanair posts €88m quarterly profits but Boeing MAX delays frustrate

Irish carrier, which operates more than 30 routes out of Liverpool, saw a big turnaround from the €66m loss in the same period in 2018 but doesn’t expect any MAX deliveries until autumn. Tony McDonough reports

Ryanair, aircraft
Ryanair, aircraft

 

A surge in Christmas bookings saw low-cost airline Ryanair return to profit in the three months to December 31, 2019.

The Irish carrier, which operates more than 30 routes out of Liverpool Lennon Airport, saw quarterly profits rise to €88m, a big turnaround from a €66m loss in the same period in 2018. Total revenues were €1.91bn and passenger numbers were up 6% to 36m.

However, Ryanair’s frustration at the ongoing delays to the delivery of the Boeing 737-MAX-200 aircraft continues. Ryanair has ordered up to 135 737 Max planes with an option to buy another 75.

It was originally due to start taking delivery in early to mid 2019 but the aircraft has been grounded since following two separate crashes in Indonesia and Ethiopia which killed 346 people. This has meant a downgrade in passenger forecasts

Ryanair says that when it finally has the MAX in service it will be a “game-changer” for the company, offering 4% more seats while burning 16% less fuel. It now doesn’t expect to receive any of the aircraft until September or October this year.

The company said: “Due to these delivery delays, we won’t see any of these cost savings until late FY21. As a direct result of these delivery delays, we plan to extend our 200m per annum passenger target by at least one or two years to FY25 or FY26.”

The business expects full year traffic to grow by 8% to 154m passengers. Ancillary revenues continue to grow, but at a slower rate having annualised the cabin bag changes in November.

Ryanair’s Austrian-based subsidiary Lauda continues to underperform with fares much lower than expected, despite strong traffic growth and high load factors. Ryanair blames price competition with Lufthansa subsidiaries in both Germany and Austria.

Lauda’s management is implementing a new cost cutting plan and is improving penetration on ancillary products. Lauda will grow its fleet from 23 to 38 A320s by S.20 with increased capacity in Vienna and a new base in Zadar.

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