Ryanair Sees Boeing Max 200 Driving Better Unit Costs

 - October 22, 2018, 2:43 PM

Despite its yearlong woes over pilot and cabin crew contracts, Ryanair remains confident it will maintain its cost leadership over other airlines in Europe, partly thanks to the Boeing Max 200 narrowbodies scheduled to start joining its fleet in the spring. The Irish low-cost carrier has placed orders for 135 of the type and holds options on a further 75. It will become the first airline to operate the Max 200 after it takes delivery of five in March and April next year. Ryanair’s Max 200 will come configured with 197 seats.

“The Max 200 aircraft, the game changer, have 4 percent more seats [compared with its 189-seat Boeing 737-800s] and a 16 percent lower fuel consumption per seat,” said Ryanair CEO Michael O’Leary during a conference call with analysts discussing the company’s results for the six months ending September 30. “These will drive very significant unit cost gains for us over the next five or six years.

“We will roll out that incremental fleet on routes all over Europe,” he said, adding that the LCC expects to take delivery of 42 examples between August 2019 and March 2020. The Max 200 will account for 10 percent of the LCC’s fleet in the fiscal year through March 2020, he said.

O’Leary acknowledged the unionization of crew will add costs and complexity, but he downplayed the effect of the recent pilot and flight attendant strikes on Ryanair’s operations.  “There is a lot of background noise out there at the moment on oil, on unions, and on kind of disruptions; it’s really noise,” he stressed, adding that the airline endured only eight strike days so far this year and operated 90 percent of its schedule on those days.

Ryanair reported a 7 percent year-over-year dip in net profit for its first fiscal half to €1.2 billion ($1.38 billion), on a 3 percent fall of average fares and a 6 percent growth in traffic, to 76.6 million passengers. Load factor stood unchanged at 96 percent.

O’ Leary expects fares at the airline to fall 2 percent in the six months ending March 31. “We are entering into a grim winter,” he said, noting that airfares across the European industry are falling. “It is not related to Ryanair or unions, it is related to excess capacity and certainly our willingness to continue to lower airfares into this winter to speed up the consolidation process,” concluded O’Leary.