Ryanair talks tough on compensation as 737 MAX woes cloud growth target

Due to the MAX delays and struggles of smaller rivals, there has been a fall in capacity in Europe

The “significant reputational hit” suffered by Boeing’s grounded 737 MAX airliner will have to be reflected in the compensation the planemaker pays Ryanair, the CEO of Europe’s biggest budget airline said on Monday.

Michael O’Leary said as part of those talks he had made an offer for the larger, 230-seat MAX 10 model, but he did not expect Boeing to engage on that until the MAX returns to service.

Ryanair is a top buyer with 210 on order but the grounding has forced it to effectively freeze growth this summer. O’Leary said his target of flying 200 million passengers a year by 2024 could be delayed by up to two years.

Due to the MAX delays and struggles of smaller rivals, there has been a fall in capacity in Europe, which O’Leary said looked set to provide a “reasonably benign” environment for fares in the coming year.

Ryanair shares were up more than 6% on Monday after Ryanair reported a third-quarter profit after tax of 88 million euros ($98 million) that showed average fares up 9%. Ancillary revenue from pre-booked seating and other options jumped 21%.

“If we are growing slower, there is probably upward momentum on our fares and yields and less capacity pressure in Europe,” O’Leary said on a conference call with analysts, but warned against “irrational exuberance”.

Read more: Reuters