Ryanair clear skies contain Boeing-shaped cloud

Boeing concern. Ryanair’s post-pandemic climb is rumbling on. The $23 billion Irish carrier led by Michael O’Leary said on Monday that profit after tax for the year ended March would come in at just under 2 billion euros – a slight narrowing of earlier guidance, but topping its previous record of 1.5 billion euros set six years ago. That puts the pandemic well in the rear-view mirror, but worries at key supplier Boeing constitute a cloud on the horizon.

The quarter to the end of December is not airlines’ busiest. But while the summer season is always hard to estimate, O’Leary said forward bookings were around 5% ahead of where they were a year ago. That gives credence to the idea that even cash-strapped consumers are loath to cut foreign getaways. Ryanair shares are up by around 75% since January 2019, outpacing peers.

Boeing is a potential source of turbulence, though. Ryanair’s nearly 600-strong fleet consists almost entirely of aircraft from the $120 billion U.S. aerospace giant, whereas rivals easyJet and Wizz Air use planes from its relatively less troubled European rival Airbus. Last week the U.S. Federal Aviation Administration announced that it would not permit Boeing to expand production of its MAX line of aircraft, after an incident in early January in which a panel blew off an Alaska Airlines MAX 9 mid-flight. That followed two fatal crashes in 2018 and 2019 involving MAX 8s that led to a worldwide grounding.

On the face of it, the risk to Ryanair is manageable. The FAA clarified that Boeing would be able to continue producing at the current monthly rate, and the Irish airline said it had assurances that its key supplier would not further delay deliveries this summer or next. O’Leary still hopes to receive around 50 new aircraft by this summer. Even if that doesn’t happen, that’s less than 10% of its fleet.

Still, protracted problems at Boeing could further delay the certification and delivery of the new MAX 10, for which Ryanair placed a mammoth 300-plane order last May. Delivery is expected in phases between 2027 and 2033, greatly increasing Ryanair’s capacity. Though rival United Airlines is sounding out the possibility of buying Airbus jets to fill a potential void left by the delayed MAX 10, Reuters reported on Sunday, switching queues is tricky.

Characteristically, O’Leary is bullish. The Ryanair boss is hopeful the MAX 10 will be certified by the end of this year and flying in 2025, even adding that he would take deliveries of MAX 10s if U.S. rivals spurned them. Even so, Boeing is likely to cast a shadow for some time yet.