Ryanair Holdings plc (NASDAQ: RYAAY) chief executive Michael O’Leary expects Boeing Co (NYSE: BA) delays to be a positive for his company’s shareholders in 2025.
The ultra-low-cost air carrier cited Boeing delays and trimmed its passenger volume forecast for the coming year from 215 million to 210 million on Monday.
But that may exert an “upward pressure on pricing through [next] summer … and flow straight through to our bottom line,” O’Leary argued this morning on CNBC’s “Squawk Box”.
Ryanair stock is in the red today after reporting a 20% year-on-year decline in quarterly profits.
Boeing delays remain frustrating for Ryanair CEO
Despite his take on what Boeing delays may mean for shareholders, Michael O’Leary agreed they remain frustrating for him as the chief executive.
Ryanair lost 5 million passengers this year and expects to lose another 10 million in 2025 due to Boeing delays.
It had an agreement with the planemaker to receive 29 deliveries before the summer of next year – but the chief executive now expects only half of them to come through.
“Boeing delays are bad for my market growth ambitions,” O’Leary added.
Boeing machinists have been on strike since September 13th after rejecting the company’s offer to increase wages by 25% over four years. The union had demanded a 40% pay increase instead.
The aerospace giant has revised its proposal twice over the past eight weeks and is now offering a 38% pay raise through 2028. The union has advised its members to approve the latest proposal as they vote on it later tonight.
However, if the labor issues persist for some reason, Ryanair may not even receive 15 aircraft from Boeing by the summer of 2025, as per CEO Michael O’Leary.
Ryanair has confidence in Boeing’s new management
On the plus side, Ryanair’s chief executive expressed confidence in the leadership of Stephanie Pope who is fully committed to getting the MAX 7 as well as the MAX 10 certified by the end of 2025.
Michael O’Leary expects these aircraft to “rocket fuel our growth and our cost advantage over every other airline in Europe for the next decade” as they have more seats but burn up to 20% less fuel.
The CEO also finds it unfortunate that Boeing receives all the “negative PR” even though Airbus’s production is just as “badly disrupted” as Boeing’s. “Airbus even has engines that have to come off the aircraft to get repaired,” he noted.
Note that Ryanair is the biggest customer of Boeing outside of the United States. It is also the only airline in Europe that’s keeping its unit costs flat at a time when other air carriers in the region have been struggling to maintain them.
Wall Street currently has a consensus “overweight” rating on Ryanair stock that pays a dividend yield of 1.75% at writing.
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