Ryanair CEO Warns of Fare Hikes Due to Lack of Planes

A shortage of aircraft could cause airfares to rise 10% in Europe this summer. The warning comes from Ryanair CEO Michael O’Leary, who also said routes could also be cut as airlines grapple with capacity shortages. 

Speaking to reporters, O’Leary forecast a “higher fare environment across Europe.”

The issue for Ryanair is the Boeing 737 Max, with deliveries delayed from the U.S. manufacturer. The European budget carrier is one of Boeing’s biggest customers globally. It has hundreds of Boeing 737 planes in its fleet, and dozens more Max jets on order. 

O’Leary said that 57 Max planes were due to arrive at Ryanair by the end of next month. However, only 40 to 45 aircraft may be ready for the all-important summer season. 

The end of March is significant as it represents the official start of the industry’s summer schedule. Many operators, including Ryanair, move aircraft and other operational resources to take advantage of the lucrative peak travel season. 

As an added complication, Easter falls relatively early this year. This means many European families will be traveling in late March and early April to vacation during the school break. 

“If we only get 40 [new planes] by about the end of March, I think we have to start announcing some minor schedule cuts,” said O’Leary.

Capacity Crunch at Boeing

Ramping up production of its flagship single-aisle airliner isn’t easy for Boeing. Along with industry-wide supply chain problems, it is also facing unique pressures. 

Late last month, the Federal Aviation Administration said it would not grant any expansion of production for the 737 Max program. This followed a serious incident onboard an Alaska Airlines plane on January 5 when a door plug blew off mid-flight.

“This won’t be back to business as usual for Boeing,” FAA chief Mike Whitaker said at the time. “We will not agree to any request from Boeing for an expansion in production or approve additional production lines for the 737 Max until we are satisfied that the quality control issues uncovered during this process are resolved.”

A Good Friend in a Crisis

The public intervention by Ryanair is notable as the airline is a key ally of Boeing.

Speaking last month at the peak of the most-recent 737 Max crisis, O’Leary described Boeing’s Group CEO and CFO as a “good team,” adding: “It is critical, we believe, to Boeing’s continued performance that we support [Dave] Calhoun and [Brian] West. I have concerns about the management in Seattle, but I have a lot of confidence in Calhoun and West. I think they’re on the right track.”

In contrast, United Airlines CEO Scott Kirby said he was examining “alternative plans” for fleet options without the Boeing 737 Max 10, a comment that O’Leary called “stupid”.

Not Just Boeing

Ryanair is not alone in experiencing capacity constraints. Low-cost rival Wizz Air has been badly hit by problems with Pratt & Whitney engines that power its Airbus A320neo fleet. Checks and any required repairs can take up to six weeks for each affected plane. 

The issue has impacted more than 30 airlines around the world including Spirit in the U.S., Air New Zealand and India’s IndiGo.

As of December 31, Ryanair had 136 Boeing 737 Max 8-200s in its fleet of 574 aircraft. The airline said last month it expected to have up to 174 737 Max 8s in its roster ahead of the peak 2024 summer period.

A spokesperson for Boeing said: “We are communicating with customers that some delivery schedules may change as we take the necessary time to make sure that every airplane we deliver is high quality and meets all customer and regulatory requirements.”

A Ryanair spokesperson told Skift they had nothing to add beyond the comments made by O’Leary.