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Boeing's (BA.US) strike affects Ryanair (RYAAY.US) as it cuts its passenger growth target for next year

AInvestMonday, Nov 4, 2024 2:50 am ET
1min read

Ryanair (RYAAY.US) has cut its passenger growth target for next year as Boeing (BA.US) delays the delivery of aircraft, the Irish low-cost airline said in a statement on Monday. The company now expects to carry 210 million passengers in the fiscal year 2026, down from a previous target of 215 million.

Ryanair said it expects to take delivery of nine aircraft in the next three months, which were due to be delivered in the third quarter, due to a strike at Boeing. The airline said its outlook "is highly dependent on Boeing ending the strike as soon as possible and ramping up production relatively quickly. We believe it is sensible to allow a slight moderation of growth at this stage."

Ryanair is one of the airlines waiting for Boeing aircraft. The company is facing production quality issues and a strike by workers. Earlier this year, it had to limit production of its best-selling aircraft after a cabin door fell off a Boeing 737 MAX9 in mid-air. The strike by Boeing workers in the US has also had a knock-on effect, with key supplier Spirit AeroSystems (SPR.US) preparing to temporarily lay off about 700 workers and consider further job cuts.

Ryanair's second-quarter net profit fell 6% to €1.43bn (US$1.6bn), with average fares down 7% to €61. The airline said its target for 2025 was still to carry 198-200 million passengers.

Ryanair warned that fares in the third quarter would be "slightly lower" than a year ago, suggesting it will have to keep stimulating demand. Meanwhile, Sorahan said consumers were becoming more confident as interest rates fell.

The airline still expects to take delivery of Boeing's Max10 aircraft in the first half of 2027, Sorahan said, as the certification timetable for the Max7 and Max10 is still on track.

Ryanair is the first major low-cost airline to report its latest quarterly results. Its shares have fallen 5.5% this year, compared with a 38% drop for Wizz Air and a 2% rise for EasyJet.

The Ryanair board announced an interim dividend of €0.223 per share, which will be paid early next year.

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