Ryanair Holdings PLC (LSE:RYA) has scaled back passenger growth guidance for the coming year and signalled price hikes due to delays in new plane deliveries from Boeing Co.
Boeing was no longer expected to deliver “sufficient” aircraft to facilitate passenger growth to 210 million over the coming fiscal year, Ryanair said in results on Monday.
Though the production of 737 jets has been recovering since the strikes at Boeing late last year, delays have “forced” the target to be cut to 206 million, or "just" 3% growth, it added.
“Over the coming year, we’ll reallocate this scarce capacity growth to those regions and airports (in Poland, Sweden and Italy) who are investing in growth by cutting/abolishing aviation taxes, and incentivising traffic growth,” the airline noted.
Chief financial officer Neil Sorahan commented that delays to deliveries from Boeing were “the only thing that’s behind the cut in the traffic”.
He added “the ramp-up after the strike wasn’t as fast as we’d have liked,” after a walk out by Boeing workers late last year brought production to a standstill for several weeks.
European airlines were expected to remain “capacity-constrained” as a result, leading to a knock-on effect on prices.
“We’ve turned a corner on fares,” Sorahan said, “in a capacity-constrained market my gut would say that fares will be up in the coming year”.
A stronger Christmas and New Year had fueled a 9% increase in traffic to 45 million passengers over the third quarter, results also showed.
Aided by marginally higher fares, post-tax profit surged from €15 million (£12.6 million) to €149 million on a 10% increase in revenue to €2.96 billion.
Operating costs rose 8% to €2.93 billion in the meantime, partly due to Boeing delays, while savings from fuel hedging were highlighted.
Around 85% of fuel had been hedged for the coming quarter, alongside 75% for the year ahead, Ryanair said.
Shares climbed 2.1% on Monday.