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Ryanair expansion plans pushed back by Boeing MAX grounding

Profit swung to €88mln compared to a €66mln loss last year but the Boeing 737 MAX delays hit growth targets

Ryanair Holdings plc - Ryanair returns to profit as expected

Ryanair Holdings plc (LON:RYA) says the grounding of the Boeing MAX aircraft has pushed its 200mln annual passenger target back by up to two years.

The airline is also not expecting any cost savings from the plane’s introduction until early 2021, while it will now be 2025 or 2026 before it attains the passenger target.

The Irish company does not expect the first MAX aircraft to be delivered until September or October at the earliest, but still expects the aircraft to be ‘gamechangers' when they are finally delivered.

Boeing said last month the ungrounding will begin during mid-2020 but the Federal Aviation Administration previously reiterated there is "no timeframe for when the work will be completed".

As it flagged recently, a strong festive period meant a profit of €88mln compared to a €66mln loss in the third quarter to 31 December.

READ: Ryanair Holdings shares rise as it upgrades profit guidance thanks to strong Christmas bookings

Average fares and ancillary revenue per passenger jumped 9% and 21% respectively.

Profits for the fourth quarter are 1% ahead 2019 at “slightly” better than expected average fares, while full-year traffic is estimated to rise 8% to 154mln guests.

Guidance was kept unchanged at profits after tax of €950mln to €1bn.

Analysts at Liberum said this is “potentially pessimistic” because it implies a loss of €240mln which is 17% higher than 2019, considering profit for the first nine months this financial year is €1.2bn.

“Industry capacity growth remains subdued, helped by the absence of Thomas Cook capacity and the ongoing Boeing MAX grounding,” they said, adding the three months to March are the “seasonally weakest period.”

Shares rose 5% to €15.54 on Monday at the opening bell.

--Adds shares, detail--

Quick facts: Ryanair Holdings plc

Price: 10.2 EUR

LSE:RYA
Market: LSE
Market Cap: €11.11 billion
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