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Ryanair is seeking compensation from Boeing over worsening plane delivery delays that have forced the airline to lower its passenger number forecasts and warns it is on the verge of canceling some flights this summer.
Michael O’Leary, Ryanair’s chief executive, said he was “genuinely sure” how many 737 Max planes Boeing will deliver in time for the peak summer months, stressing that the US aerospace company was immersed in a “shit show ” production after the fuselage exploded on an Alaska Airlines flight in January.
Boeing has come under intense scrutiny over the crash, and the U.S. aviation regulator has barred it from expanding production of the 737 Max, its most popular plane.
Alaska Airlines and Panama’s Copa Airlines have asked Boeing to compensate for losses caused by the crash and subsequent grounding of the planes. O’Leary’s comments show that Boeing may face additional compensation claims for delays in the manufacturing process.
“There is a debate with Boeing about whether we are entitled to compensation for these delayed deliveries,” O’Leary said at a news conference Friday.
He said the discussions focused on whether the production problems constituted “excusable delays,” which would not be subject to compensation as stipulated in the contract with Boeing.
“We’ve been very firm that it’s unforgivable,” he added: “Our growth has been limited because right now we don’t really know how many planes we’re going to have. . . there’s a shit show going on [Boeing’s main production line] Seattle,” he said.
Ryanair had expected to receive 57 737 Max-8 planes by June to deploy during the peak summer months, but has regularly revised its estimates downward as production problems gripped Boeing.
“Boeing would try to argue that it’s excusable. I think we will get a modest compensation from Boeing. But our goal is not to get compensation from Boeing, our goal is to take those damn airplanes away from them,” she added.
O’Leary said his airline will likely receive between 40 and 45 planes, although the number could fall below 40. Ryanair’s summer schedule for 2024 is based on receiving at least 50 planes from Boeing, and O’Leary said the airline would have to announce “minor schedule cuts” by the end of March if only 40 had arrived by the end of March.
It said Ryanair would cut flights from routes with multiple daily frequencies to avoid inconvenience to customers. “We will be able to offer affected customers alternative flights on the same day or on other days.”
Ryanair now expects to carry 183.5 million passengers in the current financial year ending in March, down from the 185 million forecast. However, he added that Boeing’s problems will hit passenger numbers in the next financial year, which will be “towards 200 million” instead of the 205 million expected.
The Irish executive said demand for flights had never been brighter, but the technical problems, which have also affected other airlines due to inspections of engines used on some Airbus planes, would result in higher fares for customers .
He said the airline is “on track to make something around 1.9 billion euros” in profits this year. According to the most recent results from January, the airline would have earned between 1.85 and 1.95 billion euros.
O’Leary, whose growth ambitions depend on Boeing planes, has consistently supported the company’s top executives despite production problems.
Some executives at other airlines, including United Airlines and Emirates, have been harsher in their criticisms as frustration grows among Boeing customers.
Boeing said it was communicating with customers about some delivery schedules. He added: “We deeply regret the impact this is having on our valued customer, Ryanair. We are working to address their concerns and take action on a comprehensive plan to strengthen 737 quality and delivery performance.”