Ryanair Holdings’ (GB:0A2U) (NASDAQ:RYAAY) issues with American aircraft maker Boeing (NYSE:BA) keep growing deeper. The Irish low-cost carrier is forced to lower its passenger flying forecast owing to the production and delivery delays of Boeing’s 737 Max-8 jets. For Fiscal 2024, Ryanair expects to carry 200 million fliers instead of the earlier target of 205 million. The airline also warned about higher fares due to capacity constraints.
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Ryanair’s Issues
Ryanair was expected to receive about 57 of Boeing’s Max jets by June to ramp up flights for the peak summer travel demand. However, following the mid-air flight fiasco in Alaska Airlines (NYSE:ALK), Boeing has halted the production of these aircraft, as they are being scrutinized by the authorities. Even so, Ryanair CEO Michael O’Leary believes the company will receive not more than 40 jets by mid-March.
The European airline has cautioned that it would have to cut a few flights from daily frequent flying destinations to avoid disturbing customers and that it would be able to offer alternate flights to such customers. Despite the hiccups, O’Leary said the carrier was on track to generate €1.9 billion in profits in FY23, in line with its most recent guidance given in January.
Ryanair and Boeing are undergoing discussions as to whether the delivery delays are “excusable delays” and if the former qualifies for compensation. Ryanair is hopeful of some modest compensation as its growth has been constrained due to these issues. Having said that, O’Leary said that the primary motive is to receive the aircraft deliveries on time from Boeing and not compensation.
Is Ryanair a Good Stock to Buy Now?
With only one Hold rating received during the past three months, 0A2U stock has a Hold consensus rating on TipRanks. The Ryanair Holdings share price forecast of $145 implies 3.2% upside potential from current levels.
