Ryanair First-Half Profit Gains
Ryanair First-Half Profit Gains
(Bloomberg) --
Ryanair Holdings Plc called on Europe’s air-safety regulator to speed up work on returning Boeing Co.’s grounded 737 Max to service as the planemaker addresses fixes for the jet after two fatal crashes.
The European Union Aviation Safety Agency, known as EASA, is failing to move at the same pace of the U.S. Federal Aviation Administration, which is leading the scrutiny, Ryanair Chief Executive Officer Michael O’Leary said in an interview with Bloomberg TV. The company has 135 orders for the Max.
“They’re dragging their heels,” he said Monday. “We set up a Max users’ group here in Europe and we’re looking for an early meeting with EASA, but EASA seems to be trying to avoid that. They need to move with a little more pace.”
Boeing has been upgrading software on the Max that was linked to the crashes at Lion Air and Ethiopian Airlines, and has said it expects that the plane will be cleared to fly this year. At the same time, EASA has warned that it may take longer to get the model back into service while it checks through the fixes.
O’Leary said that Boeing and the FAA “haven’t been easy to deal with” in recent months but that the manufacturer -- who he said he speaks with about once a week -- has identified and rectified the issues with the plane. He spoke after Ryanair shares rose 5.7% following higher-than-expected earnings.
“We are one of the airlines with a Max simulator here in Europe,” he said. “We’re very confident that this aircraft is safe. The regulators need to work with us as an industry to get this aircraft back flying.”
EASA, headed by Executive Director Patrick Ky, didn’t immediately respond to requests for comment before normal office hours.
Deliveries Slip
Ryanair said it now expects to get its first Max jets in March or April rather than January or February, based on the model getting clearance to fly in North American before Christmas.
The company was due to take delivery of 58 planes high-capacity variants ahead of the summer 2020 travel season, but now expects to get only about 20, O’Leary said. The total could increase to 30 by the year’s peak period, though only if the aircraft is re-certificated this year, he said.
The delivery delays are holding back expansion and causing Ryanair to extend leases and hold off on selling older planes, Chief Financial Officer Neil Sorahan said in an interview. The airline is also moving ahead with plans to close some bases and cut job cuts to make up for the lower than expected capacity growth and absence of fuel efficiencies from the Max.
Earnings Boost
O’Leary said that’s not necessarily the worst outcome in a European market where a glut of seats has weighed on prices for the past few years.
Ryanair posted an 8% gain in fiscal second-quarter net income to 910 million euros ($1 billion) following a revenue boost from selling extras like speedy boarding and reserved seats. It refined its full-year profit guidance to a narrower range as O’Leary said he’s more optimistic about future operating conditions, predicting a lower oil prices and easing of competition.
The stock was trading 5.6% higher at 13.09 euros as of 8:21 a.m. in Dublin, where the airline is based.
To contact the reporters on this story: Siddharth Philip in London at sphilip3@bloomberg.net;Manus Cranny in London at mcranny@bloomberg.net
To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Christopher Jasper, Tara Patel
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