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Boeing grounds Ryanair guidance

The grounded Boeing 737 Max continues to be the bane of the airline
November 4, 2019

Ryanair (RYA) has cut the target range for its full-year post-tax profits, with Boeing 737 Max disruption, rising fuel costs and spiralling losses in the airline’s Lauda outfit expected to weigh on earnings.

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In July, Ryanair cut the number of 737 Max-200 jets it expected to receive for the summer of 2020 from 58 to 30. The planes remain grounded after two software-related crashes, and Ryanair has now cut this further to 20 aircraft. Subject to regulatory approval, the airline expects to receive the planes in March or April, although it caveated that “the risk of further delay is rising”. The planes, which are more fuel-efficient, were expected to help Ryanair achieve cost savings – these will not now be achieved until 2021.

Full-year losses for Ryanair’s Lauda brand will exceed expectations, which Ryanair attributed to overcapacity in Austria and Germany. Ryanair also envisages a €450m (£389m) rise in its fuel bill. The airline has narrowed its full-year guidance for post-tax profits accordingly to a new range of €800m-€900m, from a previous range of €750m to €950m.