Boeing’s continued MAX woes could cause turbulence for Ryanair

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Boeing Co’s (NYSE:BA) ongoing issues around the safety of its troubled 737 MAX planes could also spell trouble for budget carriers such as Ryanair Holdings PLC (LON:RYA) as the aviation industry looks to restart following the coronavirus pandemic.

The aircraft were grounded in April after the group identified several electrical issues with the aircraft’s backup power unit, less than six months after being cleared to return to the skies following two fatal crashes which forced regulators to suspend their operation in March 2019.

READ: Boeing descends as it warns of another possible MAX fault

Since the most recent stoppage, the company has identified three areas of the aircraft’s electricals that may be causing the problem, while last week a Reuters report revealed that US air safety officials had asked Boeing to provide more analysis and documentation showing that the issues would not affect other areas of the MAX’s subsystems.

The electrical problems have caused around 25% of Boeing’s fleet of MAX aircraft to be suspended from operating, although the firm is expected to release more information on potential repairs as soon as this week as well as a possible timetable on when the aircraft will once again be cleared to fly.

While the ongoing problems with the MAX remain a reputation and financial disaster for Boeing, the suspension of the aircraft could also throw a spanner into the works of numerous airlines that have ordered multiple MAX aircraft to upgrade their fleets.

One such carrier is Ryanair, which last December confirmed an order for 75 new MAX-8200 aircraft, increasing its total firm order to the plane model to 210 from 135 previously for a price tag of over US$22bn.

READ: Ryanair confirms order for 75 new Boeing MAX aircraft

As the travel industry aims for a return to relative normalcy in the summer period as lockdown restrictions ease, airlines are preparing for fierce competition over passengers to rake in as much cash as possible to repair their balance sheets, which suffered a battering in 2020 as the pandemic grounded flights across the world.

However, the ongoing delay of the MAX returning to active flights may kneecap Ryanair’s expansion plans and potentially give the edge to rivals such as easyJet PLC (LON:EZJ), which purchases aircraft from Boeing’s French rival Airbus.

Shares in Ryanair were down 3.2% at €16.72 in late afternoon trading in London on Tuesday, while Boeing shares fell 3% to US$225.94 in mid-morning trading in New York.

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