Business

Ryanair boss calls on Boeing to improve quality control after mid-flight accident

Michael O’Leary says manufacturing issues at US group and its rival Airbus will cut profits and put up fares

Ryanair chief executive Michael O'Leary has criticised Boeing in the past. Photograph: House of Commons/UK Parliament/PA Wire

Tue Jan 9 2024 - 07:46

Ryanair boss Michael O’Leary has called on Boeing to improve quality control, warning his airline’s profits will fall and fares will rise because of manufacturing issues plaguing the US group and its rival Airbus.

Both manufacturers are striving to make aircraft as fast as they can to meet booming demand amid a global shortage of planes.

But an accident on Friday when part of a Boeing 737-9 Max fell off during an Alaskan Airlines flight is a new problem for the US company, which was already struggling with deliveries and long-running supply chain issues.

“Capacity is heavily challenged ... air fares, particularly peak summer, are going to be higher because there’s going to be less short-haul capacity around Europe,” O’Leary said.

READ MORE

“The real challenge for both Airbus and Boeing is they are both running behind on their plans to increase monthly production. A lot of that is supply chain pressures. I think that both Airbus and Boeing, certainly Boeing, need to significantly improve quality control,” he said.

Boeing declined to comment.

Tim Clark, president of Dubai-based Emirates, said the accident was a setback for Boeing as it seeks to win back market share after its fleet was grounded in 2019. “They’ve had quality-control problems for a long time now, and this is just another manifestation of that,” he told Bloomberg on Monday. “I think they’re getting their act together now, but this doesn’t help.”

Ryanair is one of Boeing’s largest customers and has about 400 aircraft on order. It operates and orders different variants of the 737 Max from the type grounded by US regulators following the Alaskan Airlines accident.

O’Leary said Ryanair has already been hit by delivery delays on its new aircraft, which is likely to affect profits because it will not be able to carry as many passengers as expected in its next financial year.

[ United and Alaska Airlines find loose parts on Boeing 737 Max 9 jets ]

O’Leary said: “We were supposed to have 27 aircraft delivered prior to Christmas, we finished up getting 11. We’re supposed to have 57 aircraft delivered to us by the end of April, and we think we’d be lucky to get 50 by the end of June. So we’re going to be left five, seven, maybe 10 aircraft short for the peak summer season this year.”

He said he expected Ryanair’s full-year passenger numbers for its financial year beginning in April to fall from 205 million to 200 million because of the delivery delays.

“It costs us, if you’re talking being down 5 million on 205 million passengers ... probably two, two and a half per cent of profits,” he said.

Ryanair cut some flights this winter and in July revised down its passenger forecasts for its current financial year from 185 million to 183.5 million because of the Boeing delays.

O’Leary has previously criticised Boeing’s senior management, saying they were “not up to the job” in 2022 as delivery delays hit.

But he said he thought the company had improved its performance, despite its recent problems.

“I think they’re doing a better job now ... I think they’re working their way through the problems,” he said.

“The 737 is fine. But it doesn’t need these kind of short-term reputational issues,” he added.

Some airlines flying Airbus planes also face disruption this summer because their engines require early inspection to check for defects.

More than a thousand Pratt & Whitney engines need to be removed from Airbus aircraft and inspected, forcing a number of airlines to change their schedules or ground aircraft.

In Europe, Ryanair’s rival Wizz Air has been hit particularly hard and has cut its growth targets. Chief executive József Váradi told the FT in November that the airline faced an “unprecedented operational challenge” that could last 18 months.

Airbus had a backlog of 8,184 passenger aircraft at the end of 2023, while the figure for Boeing was 5,661, of which 4,515 were variants of the 737 Max, according to provisional figures from aviation data company Cirium. – Copyright The Financial Times Limited 2024

LATEST STORIES