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Ryanair cautious about ‘fragile’ recovery, berates Boeing

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Ryanair posted a 355 million euro loss for the pandemic-scarred 12 months to March 31 on Monday and said it planned to grow its traffic to 165 million passengers this year

Ryanair said it was impossible to give detailed guidance beyond hoping to return to “reasonable profitability” this year amid uncertainties over COVID-19 and the Ukraine war, knocking its shares after posting a smaller annual loss.

Europe’s largest airline by passenger numbers also became the latest Boeing customer to criticise the planemaker. CEO Michael O’Leary said its management needed to step up and deliver aircraft more quickly or make way for a new team.

Ryanair posted a 355 million euro ($369 million) loss for the pandemic-scarred 12 months to March 31 on Monday and said it planned to grow its traffic to 165 million passengers this year, from 97 million a year ago and a pre-COVID-19 record of 149 million.

However, O’Leary said it was “impractical, if not impossible” to provide a sensible or accurate profit guidance range until the second half of its fiscal year, given the continued potential risks.

O’Leary added that while bookings had improved in recent weeks, he was a little concerned that competitors were talking up the summer recovery too much and that caution was needed heading into a winter with an expected economic downturn.

“It’s too fragile, there remains too many moving parts,” O’Leary said, adding that Ryanair would nevertheless thrive if any of its markets dip into recession due to its lower cost base and ability to offer lower fares than its competitors.

Chief Financial Officer Neil Sorahan told Reuters fares were lower in recent weeks than the company had anticipated following a drop of 27% last year. While cautiously optimistic that peak summer fares will be “somewhat ahead” of pre-pandemic levels, O’Leary said it was impossible to predict winter pricing.

Customers were also still waiting until much closer than usual to the time of their trips to book, he added.

Ryanair shares were 4.3% lower at 13.00 euros by 1100 GMT.

BOEING CRITICISM

O’Leary also said that while Ryanair remained a willing Boeing customer and hoped to receive more of the planemaker’s new 737-8200 jets than planned over the next two summers, it could turn to the second-hand leasing market to fuel further growth unless Boeing stepped up with some additional orders.

Ryanair last year walked away from negotiations with Boeing for 200 of its largest type of single-aisle jet, the 737 MAX 10. O’Leary described Boeing management on Monday as “running around like headless chickens” and said “they need to bloody well improve”.

“Boeing need a management reboot in Seattle and either the existing management needs to up its game or they need to change the existing management,” O’Leary told an analyst call.

A spokesperson for Boeing was not immediately available for comment.

At the end of April, Boeing expressed doubts over hitting jet delivery targets as technical problems, inflation and supplier risks clouded its path toward recovery. Read full story

Boeing President and Chief Executive Officer Dave Calhoun said at the time: “We’re going to deliver great airplanes. And we’re going to recognize the costs associated with it.”

O’Leary’s comments follow similar criticism of Boeing leadership by two senior aircraft leasing executives, Air Lease Corp AL.N Executive Chairman Steven Udvar-Hazy and Avolon CEO Domhnal Slattery. Read full storyRead full story

However, the head of the world’s largest aircraft leasing company, AerCap boss Aengus Kelly, last week threw his weight behind Boeing and said the jetmaker would overcome a spate of industrial and certification problems. Read full story

Ryanair’s full-year pre-exceptional loss of 355 million euros was less than a forecast loss of 370 million euros in a company poll of analysts and a loss of 1 billion euros in its previous financial year. The airline made a profit of 1 billion euros in the year to March 2020.

O’Leary said Ryanair, which has hedged 80% of its 2023 fuel needs and 10% for 2024, would likely be profitable in the coming year, even if the outlook was worse than anticipated but that it would be significantly behind pre-pandemic levels.

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