4th Dec 2019 12:48
(Alliance News) - Ryanair Holdings PLC on Wednesday warned traffic growth will suffer and it will be forced to close two more bases due to lower than expected number of Boeing Co's B737 MAX aircraft deliveries.
Shares in the company were 1.4% higher at EUR13.78 each in London on Wednesday afternoon.
Ryanair said it now expects to receive just 10 MAX aircraft rather than 20 as previously predicted.
The Irish budget airline said that as a result of the aircraft delivery delays, it has cut its traffic growth forecast for the year to March 31, 2021, by 0.6% to 156 million passengers from 157 million.
Receiving just half the 737 MAX aircraft means Ryanair will also close two more bases in summer 2020, in Nuremberg, Germany, and Stockholm Skavsta, located roughly 100 kilometres from the Swedish capital.
In August, Spanish trade union Sindical Obrera said Ryanair would close its bases in Las Palmas, Tenerife South, Lanzarote and Girona from January 2020.
Boeing's 737 MAX aircraft was grounded in March following a pair of deadly crashes that killed 346 people. On Tuesday, the aircraft manufacturer was dealt a further blow after US carrier United Airlines Inc ordered 50 new long-haul jets from European rival Airbus SE.
Ryanair added: "We also expect to cut summer capacity in a number of other existing bases, and we are currently in discussions with our people, our unions, and our affected airports to finalise these minor reductions."
Over the course of 2019, the carrier was mired in strikes, with industrial action being taken in August. Strikes were also scheduled for the end of September, but were called off.
Eddie Wilson, chief executive of Ryanair-branded unit, said: "We regret these two further base closures and minor capacity cuts at other bases which are solely due to further delivery delays to our Boeing MAX aircraft. We are continuing to work with Boeing, our people, our unions and our affected airports to minimise these capacity cuts and job losses."
On Tuesday, Ryanair said group traffic rose by 5.8% in November to 11.0 million from 10.4 million in the comparative period.
By Eric Cunha; [email protected]
Copyright 2019 Alliance News Limited. All Rights Reserved.
Related Shares:
RYA.L