In the dynamic and competitive aviation industry, delays in aircraft delivery can have serious consequences. Ryanair, Europe’s largest low-cost airline, is actually facing exactly this problem.

Michael O’Leary, the chief executive of Ryanair Holdings, recently voiced strong criticism of Boeing, citing repeated disappointments regarding the delivery of new aircraft. This situation provides information on the airline’s expansion plan and capacity planning for the comments already made.

O’Leary made it clear in an interview that Ryanair will only receive five aircraft from Boeing in August 2023 instead of the originally planned ten. This announcement followed similar delays in July, when Boeing was supposed to deliver seven jets but only handed over five to Ryanair. These major delays are forcing Ryanair to rethink its capacity planning and potentially slow down its planned expansion.

For an airline like Ryanair, which relies heavily on the availability of new and more efficient aircraft to maintain its low-fare policy, such delivery delays are not only annoying but potentially damaging to business. The expected reduction to 20-25 new aircraft by summer 2025 – compared to the 29 originally planned – means that Ryanair may not be able to meet the increasing demand for cheap flights in Europe and beyond.

Background to the delays

Boeing’s ongoing delays in aircraft deliveries have been smooth sailing. The US aircraft manufacturer has struggled with a number of problems in recent years, including production errors, technical defects and challenges in certifying new models. A particularly serious incident occurred earlier this year when Alaska Airlines had a cabin panel placed in mid-air. This incident forced Boeing to submit a comprehensive plan to the Federal Aviation Administration (FAA) to improve safety management and quality assurance.

These problems are being directed at Boeing’s ability to deliver aircraft to its customers on time. For Ryanair, which relies heavily on the Boeing 737 Max models, this poses significant challenges. The airline has ordered 150 B737-10s, with an option for a further 150 aircraft, as well as 48 B737-8-200s. However, the first deliveries of the Max 10 are not planned until 2027, which further increases uncertainty for the airline.

Impact on Ryanair’s business model

Ryanair has the same name as the airline’s flagship airline in Europe, in addition to its large number of airlines and minimal transportation costs. This strategy is based on the efficient use of modern and fuel-efficient aircraft, which allows the airline to keep operating costs low while reducing ticket prices. Any delay in the delivery of new aircraft negatively affects this strategy, as it prevents the airline from opening new routes or expanding existing capacity.

O’Leary and his team may have to adjust their plans for 2024, particularly with regard to capacity planning. Chief Financial Officer Neil Sorahan had expressed confidence in May that the Max 10 would arrive on time, but the ongoing problems at Boeing could mean that Ryanair has to reduce its fleet availability. Not only will this slow the company’s growth, but it will also affect Ryanair’s competitiveness in the European market.

Influence on the market and on Boeing

Boeing’s delivery delays have an impact not only on Ryanair, but also on the aviation market as a whole. Boeing is one of the world’s largest aircraft manufacturers, and problems with the delivery of its aircraft affect numerous airlines worldwide. These delays could lead airlines to look for alternative solutions, whether by extending the useful life of older aircraft or by ordering from Boeing’s main competitor, Airbus.

For Boeing, this not only means a short-term loss of reputation, but also potential long-term economic consequences. If airlines like Ryanair lose confidence in Boeing’s ability to deliver on time, they may increasingly rely on Airbus as a supplier in the future. This could further weaken Boeing’s position in the highly competitive market.

Boeing’s repeated delivery delays pose major challenges for Ryanair and are forcing the airline to rethink its expansion plans. While Ryanair has been known in the past for its ability to respond flexibly to market changes, this situation could be more serious as it threatens the airline’s core business model.

For Boeing, this is another setback in a series of problems that have plagued the company since the launch of the 737 Max range. It remains to be seen whether Boeing will be able to stabilize its production and delivery processes and regain the trust of its customers. In the meantime, Ryanair faces the challenge of finding ways to minimize the impact of these delays while still maintaining its position as the leading low-cost carrier in Europe.