Ryanair’s boss has lashed out at Boeing accusing the company’s management of “running around like headless chickens.” The comments come after the airline, which operates an overwhelmingly Boeing-dominated fleet, raised concern over the aerospace manufacturer’s inability to deliver orders on time.
O’Leary doesn’t hold back
Boss of Ryanair Michael O’Leary isn’t known for his soft words and certainly didn’t mince them during a company earnings call earlier this week. Speaking on the call, O’Leary said:
“At the moment, we think the Boeing management is running around like headless chickens… We’re very happy to work with existing management, but they need to bloody well improve on what they’ve been doing delivering to us over the last 12 months . “
While Ryanair’s boss called on the manufacturer to get a grip, he stopped short of calling for any management change. Photo: Arran Rice.
Although critical of Boeing, the remarks are most notable for their support of the current management team. There has been growing disquiet over the position of Dave Calhoun, Boeing’s CEO, after a slew of bad news, including trouble with 787 documents and the 777X being delayed until at least 2024.
The Chief Executive of the world’s second-largest aircraft lessor Avolon, Domhnal Slattery, recently dished out some harsh words about Boeing and its leadership. Speaking at the Airfinance Journal conference in Dublin, he said, “I think it’s fair to say that Boeing has lost its way.” He added that “Boeing has to fundamentally reimagine its strategic relevance in the marketplace,” clarifying that this would require “fresh vision, maybe fresh leadership.”
Ryanair currently operates a fleet of 471 Boeing aircraft and, at the end of the first quarter, had a further 145 Boeing 737s on order. The group calls the Boeing 737 MAX a game-changer aircraft that boasts a 4% increase in seats and a 16% reduction in fuel burn.
The airline posted better than expected results in its Q1 2022 report. Photo: Arran Rice.
Ryanair predicts a return to profit despite Boeing headaches
Despite O’Leary’s comments, the group has reason to be cheery. In its Q1 2022 report, the airline predicts that it will return to profit in 2023, albeit while warning of a “fragile recovery.” Ryanair Group has managed to cut its losses from US $ 1.05 billion in 2021 to just US $ 393 million for the year ending March 31st, 2022 year.
The airline carried 97.1 million passengers in the last financial year, compared to just 27.5 million for the previous period. The group now predicts it will carry 165 million this financial year, higher than the 149 million pre-pandemic figure.
However, rising fuel and labor costs may hurt Ryanair’s bottom line and return to profitability. The price of fuel is the single largest cash outflow for airlines, accounting for anywhere between 30% and 60% of expenditure. Jet fuel prices have risen by over 100% compared to last year due in part to the war in Ukraine. This rise is already resulting in higher fares for passengers and reduced profits for airlines.
The sector is also seeing labor prices soar as airlines struggle to recruit the number of workers they need to deal with the expansion in demand. During the height of the pandemic, carriers slashed their staff numbers. As demand has returned, many airlines haven’t been able to attract enough workers. This has led to flight cancellations and even a reduction in the number of seats on some aircraft.
With rising inflation also threatening to upset aviation’s recovery, airlines could likely do without aircraft manufacturer issues.
What do you think of O’Leary’s comments? Let us know in the comments below.
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