Ryanair Freezes Payment to Boeing on 737 Max Delivery Delays

Ryanair Holdings Plc Chief Executive Officer Michael O’Leary gave a pessimistic outlook for the resumption by Boeing Co. of deliveries of its grounded 737 Max, saying the carrier has frozen payments to the manufacturer and started talks on recouping costs of the delay.

Deliveries of the aircraft will likely slip “another couple of months” to March or April, he said at an annual shareholders’ meeting Thursday, calling it the biggest operational challenge currently facing the Irish discount airline.

“The best outlook is the first aircraft will come in January, more realistic outlook is end of February or March,” O’Leary told reporters. “If it runs later than March, April or May we will have to take some more aircraft out of next summer’s schedule and slow down the growth further.”

Any delays in adding the new planes to its fleet could lead to more job losses. “The number has moved between 500 and 700, some of that depends on the Max delays,” he said. “At the moment we are 500 surplus pilots.”

Ryanair has already warned it could close some European bases and shrink others in response to concerns around Brexit and delays with Boeing Max deliveries. The aircraft was grounded following two fatal accidents in Indonesia and Ethiopia, and there’s no firm date when regulators will allow the resumption of flights.

The U.S. Federal Aviation Administration and the European Aviation Safety Agency are “largely on the same page” about the plane, although they don’t agree on everything, O’Leary said.

“It’s clear at the moment that most of Boeing’s time and effort is focused on addressing the FAA first,” he said. The carrier still expects to have about 30 of the jets in 2020, according to the CEO.

Boeing has said the jet may return on a “phased” timetable if regulators worldwide make decisions at their own pace, without following the U.S.’s lead. India plans to join EASA in making its own assessment, Bloomberg News reported. The European regulator is planning to send its own pilots to the U.S. to conduct flight tests.

At the meeting Thursday, O’Leary said he’s not planning to retire soon. Yet the CEO also told reporters his priorities have shifted to wanting to spend more time with his family.

“My life is changing,” he said. “In my thirties and forties all I wanted to do was work for Ryanair and spend all my life working. I cannot now spend all my life working.”

Shareholders approved a bonus plan for the executive with a narrow 50.5% margin.

The shares fell 1.4% to 9.80 euros at 11:40 a.m. in Dublin.