Ryanair Unhappy with Boeing’s Delays

Ryanair Group’s Chief Executive Michael O'Leary has openly expressed his discontent with Boeing's new management amid ongoing delays in the delivery of 737 MAX aircraft. The frustration comes as the airline faces the prospect of entering next summer with a potential shortfall in its aircraft fleet.

Boeing, led by its newly appointed chief executive Kelly Ortberg, who assumed the role last month, is navigating through turbulent times marked by supply chain snarls and production bottlenecks. These issues have critically impacted the scheduled deliveries of new aircraft. Ryanair, one of Boeing's key customers, has felt the consequences directly with alterations in its fleet expansion plans.

In July, Ryanair received only five new aircraft of the seven that were on the timetable. The outlook for August seems similarly grim, with the airline possibly getting just half of the 10 aircraft scheduled for delivery. This pattern suggests that the airline might only be able to add between 20 and 25 of the 29 737 MAX jets it had planned to incorporate into its fleet ahead of the lucrative summer season.

Further straining the relationship between the two companies, Boeing has signalled to Ryanair that delays are to be expected in their 737 MAX orders. Aircraft due by next spring might not arrive until the summer months of 2025, disrupting Ryanair's strategic and operational planning considerably.

Ryanair's future plans hinge on the acquisition of the 737 MAX 10, with the company having firm orders for 150 units and options for an additional 150. However, the first batch of these deliveries is not expected until 2027, marking a long wait for an airline eager to update and expand its fleet.

Moreover, the 737 MAX 7 model, which is smaller than the MAX 10, was supposed to receive certification by the end of this year. The latest projections push this certification into the first half of 2025, further adding to the complications.

Ryanair, which has been a long-standing customer of Boeing, relies heavily on the aircraft manufacturer for its single-aisle fleet. The airline's expansion and efficiency strategies are closely tied to its ability to secure new aircraft to meet passenger demand, particularly for its budget flights across Europe.

Both airline stocks have had a difficult 2024, with Boeing (NYSE: BA) down more than 30% this year, whilst Ryanair shares (NASDAQ: RYAAY) has lost 18.83% over the same period. Ryanair has shown some signs of recovery in recent days, with more than 10% gains over the past month of trading.

The ongoing challenges highlight the pressures facing both Boeing, as a manufacturer dealing with intense scrutiny over its production and delivery capabilities, and Ryanair, as an airline needing to maintain its competitive edge through fleet upgrades and expansion. As summer approaches, the focus will intensify on Boeing's ability to resolve these issues and avoid further straining their relationship with one of their most significant clients.