Ryanair Holdings plc (RYAAY - Free Report) slashed its summer 2020 traffic growth forecast due to delays in receiving the Boeing 737 MAX aircraft.
As a result of receiving only 10 MAX jets instead of 20 as planned before, the Irish low-cost airline now expects passenger growth of 156 million for fiscal 2021 (i.e. year ended 31 Mar, 2021) compared with 157 million anticipated previously.
Further, the carrier plans to close two bases in Nuremberg and Stockholm Skavsta due to unavailability of this aircraft. Ryanair is currently in talks with its staff, unions and “affected airports” to decide on summer capacity cuts at a few other bases as well.
In fact, the carrier fears that the Boeing 737 Max planes may not be available at all for the summer travel period, given the persistent delay in delivery of the grounded aircraft.
In November, Ryanair hoped to receive 20 planes in March or April 2020 instead of 30 expected initially. Due to lesser number of planes, it anticipated passenger growth to slip to 157 million from 162 million expected previously.
Zacks Rank & Other Key Picks
Ryanair carries a Zacks Rank #2 (Buy). Some other top-ranked stocks in the same space are Allegiant Travel Company (ALGT - Free Report) , Alaska Air Group, Inc. (ALK - Free Report) and Controladora Vuela Compania de Aviacion, S.A.B. de C.V. (VLRS - Free Report) . While Allegiant sports a Zacks Rank #1 (Strong Buy), Alaska Air Group and Controladora Vuela carry a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Allegiant, Alaska Air Group and Controladora Vuela have rallied more than 68%, 9% and 91%, respectively, so far this year.
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