Delayed MAX Prompts Ryanair to Cut Job, Close Bases
December 04 2019 - 11:43AM
Dow Jones News
By Peter Stiff and Benjamin Katz
LONDON -- Ryanair Holdings PLC said it would cut jobs and close
two bases as it warned traffic growth would slow next year because
of new delays in deliveries of its first Boeing Co. 737 MAX
aircraft.
The European budget carrier is one of Boeing's biggest customers
for the embattled jet and had expected to receive its first MAX
planes this spring. However, the plane has been grounded since
March after two fatal crashes and it still isn't clear when it will
resume flying.
Citing that uncertainty, Ryanair said Wednesday it had again
revised its summer schedule for next year based on receiving just
10 MAX aircraft in time for the busy travel season, rather than the
20 it previously planned.
As a result, the company now expects to carry 156 million
passengers in the year ending March 31, 2021, compared with the
latest revised guidance for 157 million.
Before the crisis, the company had expected to have close to 60
of the aircraft in its fleet in time for the crucial summer period.
In total, it has cut back its growth plans for 2020 by about six
million passengers.
To accommodate the smaller fleet, Ryanair said it would close
bases in Nuremberg, Germany, and at Sweden's Stockholm Skavsta
Airport, as well as cut summer capacity at a number of other
airports.
Ryanair said it was now working with Boeing, employees and
unions to minimize the impact of the cuts. The company didn't say
how many jobs could be lost.
The cuts, which the carrier attributed solely to MAX delays,
mark the latest fallout at Ryanair from the plane's grounding.
The Irish airline, which has ordered 135 MAX jets, already had
cautioned that profit this year would be dented by the plane's
grounding. In addition to providing better fuel efficiency compared
with its existing fleet of older generation 737 aircraft, Ryanair's
MAX aircraft is a specially designed model that can fit more
passengers.
Because it is a different design, the aircraft needs to get its
own certification from regulators, which means Ryanair will receive
its first aircraft later than other carriers. The airline said last
month it may get its first jets as late as April next year, but
cautioned that timetable could slip further.
Boeing's broader hopes of getting the MAX back in the air
appeared to suffer a blow last month when the Federal Aviation
Administration said in a letter to the plane maker that regulators
intended to inspect and sign off on every jet individually before
delivery to airlines.
Such a move signals that resuming MAX flights will be more
complicated and perhaps more time consuming than previously
projected.
(END) Dow Jones Newswires
December 04, 2019 11:28 ET (16:28 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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