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The Boeing Company (BA) - $25 value - yours FREE >>
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Ryanair (RYAAY) May Trim Summer Schedule Due to Plane Shortage
Ryanair’s (RYAAY - Free Report) CEO Michael O’Leary has warned that the budget carrier may have to raise air fares by up to 10% this summer compared with the same period last year. RYAAY passengers are likely to pay more for air-travel this summer due to non-availability of planes, induced by a delay in delivery from plane manufacturer, Boeing (BA - Free Report) .
RYAAY had originally prepared its summer schedule, anticipating delivery of 50 of the 57 Boeing Max 737-8200s it has ordered to BA. However, the Europe-based budget carrier now believes it will get 40-45 such planes.
Per O’Leary, "We don't really know how many aircraft we're going to get from Boeing." "We're pretty sure we're going to get 30 to 40. We're reasonably confident we're between 40 and 45. And now we are far less confident we're going to get between 45 and 50."
Due to the expected delay, RYAAY, currently carrying a Zacks Rank #3 (Hold), may have to cut capacity. This is likely to result in high air fares as demand is likely to swell during the summer season. You can see the complete list of today’s Zacks #1 Rank stocks here.
Delivery from Boeing is being delayed as it strives to ensure that each of its planes meets all regulatory standards. We note that Boeing has been under the scanner ever since Alaska Airlines’ Ontario, CA-bound flight (1282) on Jan 5, 2024, saw a panel and window being blown out of the Boeing 737 MAX 9 jet shortly after takeoff from Portland, OR. Alaska Airlines is a wholly-owned subsidiary of Alaska Air Group (ALK - Free Report) .
Following the scary mid-air incident, Federal Aviation Administration or FAA had ordered a temporary grounding of 171 Boeing 737 MAX 9 jets across the globe for safety-related inspection. FAA lifted the above-mentioned order on Jan 24. The approval was contingent on new inspection and maintenance checks. FAA has clarified that Boeing is prohibited from expanding 737 MAX production or adding production lines until quality improvements are implemented.