Irish low-cost carrier Ryanair Holdings Plc (GB:0A2U) (NASDAQ:RYAAY) has committed additional quality engineers to U.S. jet maker Boeing (NYSE:BA) and Spirit AeroSystems (NYSE:SPR) to inspect aircraft, a Financial Times report said. A series of disasters by Boeing-made 737 Max jets has led to the need for increased supervision and quality checks of its aircraft.
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Here’s Why Ryanair has Doubled the Engineers at Boeing
On Boeing’s request, Ryanair has doubled the engineers at the aircraft maker’s Seattle plant to 12 from six, CEO Michael O’Leary said on Tuesday. Also, Ryanair doubled the number of engineers at Boeing’s major supplier, Spirit AeroSystems, to eight from four. Meanwhile, Boeing has vouched to increase the quality checks at its end. Ryanair is also undertaking a 48-hour quality check on every jet delivered to Dublin.
O’Leary expressed confidence in Boeing’s management but reiterated that more needs to be done to maintain 100% quality. At the same time, he noted that the quality of Boeing’s jet has improved considerably since last September. Ryanair deploys only Boeing’s aircraft and is one of the major customers of its 737 max narrow-body jets. Ryanair has ordered more than 400 new jets of Boeing’s 737-Max 8 and Max 10 models. The Max 10 aircraft is due for certification by year-end.
Meanwhile, Ryanair awaits the delivery of 57 jets this year, of which only seven have been received. This will impact Ryanair’s target of flying 205 million passengers this year. O’Leary expects the delivery of 50 jets by June, which will help fly more passengers during the peak summer travel season.
Last week, a fuselage breach on an air-bound Alaska Airlines (NYSE:ALK) flight prompted an FAA (Federal Aviation Administration) inquiry and grounding of 171 of Boeing’s Max 9 jets. Ryanair does not use any of these Max 9 jets. Following the incident, Boeing has tightened its grip on quality control.
Ryanair is also in the midst of a war with online travel agencies (OTAs), some of which have banned selling its tickets on their portal. To combat the issue, the air carrier has lowered the fares for some of its flights. Ryanair has accused OTAs of overcharging customers with hidden costs at checkouts.
Is Ryanair a Good Stock to Buy Now?
On TipRanks, 0A2U stock has a Moderate Buy consensus rating based on two Buys and one Hold rating. The Ryanair Holdings share price target of $136.50 implies 12.5% upside potential from current levels.
