Michael O’Leary, chief executive of Ryanair Holdings plc NASDAQ: RYAAY, expects Boeing Co NYSE: BA delays to be positive for his company’s investors in 2025.
The ultra-low cost airline cited Boeing delays in reducing its passenger volume forecast for next year from 215 to 210 millions on Monday.
O’Leary said on CNBC’s Squawk Box that this could exert “upward pressure” on prices through the summer of next year, and then flow directly to our bottom line.
Ryanair’s stock is down today after it reported a 20% drop in quarterly profits compared to the previous year.
Boeing delays remain frustrating for Ryanair CEO
Michael O’Leary, chief executive of Boeing, acknowledged that he is frustrated by the delays.
Ryanair expects to lose 10 million more passengers by 2025 as a result of Boeing delays.
The chief executive expects that only half of the 29 deliveries agreed to with the planemaker will be made before summer next year.
“Boeing delays will hurt my market growth ambitions,” O’Leary said.
Boeing machinists are on strike since the 13 th after refusing to accept the company’s offer of a 25% wage increase over four years. The union demanded instead a 40% increase in pay.
The aerospace giant revised its proposal twice in the last eight weeks, and now offers a 38% raise through 2028. The union has encouraged its members to vote in favor of the latest proposal later tonight.
According to CEO Michael O’Leary, if labor issues persist, Ryanair might not receive 15 Boeing aircraft by summer 2025.
Ryanair has confidence Boeing’s new management
The chief executive of Ryanair, Mr. Michael Ryan, expressed his confidence in Stephanie Pope’s leadership. She is fully committed to certifying the MAX 7 and MAX 10 by the end 2025.
Michael O’Leary believes that these aircraft will “rocket-fuel our growth and give us a cost advantage over all other airlines in Europe for the next ten years” because they have more seating but use up to 20% less gas.
The CEO finds it unfortunate too that Boeing gets all the “negative publicity” despite Airbus’s production being just as “badly interrupted” as Boeing’s. He noted that “Airbus has engines which have to be removed from the aircraft in order to be repaired”.
Note that Ryanair, outside the United States, is Boeing’s largest customer. It’s also the only European airline that keeps its unit costs flat, while other airlines in the region are struggling to maintain them.
Wall Street has given Ryanair a consensus rating of “overweight”. The stock pays a dividend yield at the time of writing of 1.75%.
This post Why Boeing delays can benefit Ryanair shareholders will be updated as new information becomes available.
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