Ryanair boss declares passengers are safe despite Boeing issues

Published

4 months ago

January 16, 2024

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Ryanair’s chief executive has insisted passengers are safe in its fleet of Boeing aircraft after he raised questions about quality control at the plane manufacturer.

Speaking to Sky News following the Alaska Airlines accident that saw a fuselage panel blow out of a 737 MAX 9, Michael O’Leary said he was sending a team of engineers to oversee production of 57 aircraft he has on order, and his customers should be reassured.

“We don’t fly the MAX 9 so the issue doesn’t apply, there’s none of those aircraft in Europe.

“Boeing make great aircraft. The 737 is the most audited aircraft in history, it’s the oldest and most secure plane in the air, we’re very proud to fly them and we’ve had no kickback or pushback from passengers flying on our aircraft.”

Mr O’Leary said Ryanair will double the number of engineers it has on the ground at production facilities in Wichita, from four to eight, and Seattle, from six to 12, following a request from Boeing, as well as increasing those inspecting their own planes.

A Ryanair team met senior Boeing management including under-pressure chief executive Dave Calhoun in Seattle last week, and told them they had concerns over quality control.

Mr O’Leary said he retained full “faith and confidence” in Mr Calhoun but wanted to see improvement in quality control that in the past had seen planes delivered to Ryanair with “a spanner under the floorboards”, and items left in the hold.

He said Boeing had doubled the number of its own engineers on production lines after concerns raised by the failure of a door “plug”, that blew out at 16,000 feet apparently because four bolts had not been secured.

“I have a lot of confidence and time for the work that Dave Calhoun and Brian West, the chief finance officer, have done over the last two years. I think they’ve made very significant improvements,” he said.

“But there’s more to do. Ryanair sent a team to Seattle last week, we’ve met with the senior management, they’ve asked us to put more engineers on the ground in Seattle, which we’ve agreed to do.

“And they’ve also committed to putting more engineers that are sitting on top of quality control and quality assurance as the aircraft come off the product or the production facility.

“It is not acceptable that aircraft come out of Wichita, or aircraft get delivered from Seattle with anything wrong with those aircraft, and they need to be checking that all the bolts are secure, that all the fasteners are in the right place and the holes are in the right place.”

Mr O’Leary said he was encouraged that its most recent deliveries from Boeing had been “the best aircraft we’ve ever had from them”, adding that he expects the grounding of the MAX 9s to be lifted as soon as next week as the US-wide inspection process is completed.

Ryanair has orders for a further 57 planes to be delivered this year but to date has received only seven from Boeing, and Mr O’Leary said a likely shortfall will hit its target of flying 205 million passengers this year.

“We think we’d be lucky to get 50 by the end of June, which is just in time for the peak summer this year. So there’s no doubt we’re going to be short some aircraft.

“Our plan was to grow this year to 205 million passengers, it’s more likely to be 200, 201, 202, million. So we have to grow a little bit slower. But maybe that’s a good thing in the overall context of the work that Boeing has to do on its assembly line in Seattle.”

Mr O’Leary also rejected the British government’s plan, announced in the King’s Speech, to clamp down on “drip pricing”, the practice whereby additional costs are added into consumer purchases.

Ryanair says any “ancillary” costs added on to ticket prices, for baggage or seat priority, are legitimate and transparent, and called on the prime minister to focus on online travel agents he accused of “scamming” customers.

“What [Rishi Sunak] should be tackling is the online travel agency scams that are going on where you have these people masquerading as price comparison websites, but then duping people into making bookings and getting overcharged for air fares and overcharged some cases by 200% or 300%. That could be eliminated before the next election.”

He also called for the chief executive of National Air Traffic Control, Martin Rolfe, to be sacked following the air traffic control failure last summer, and described Brexit as “a disaster for the British economy” that made red tape in the UK more onerous than in Europe.

Business

Pinewood-owner Aermont among suitors for £850m Village Hotels

Published

9 hours ago

May 12, 2024

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Pinewood-owner Aermont among suitors for £850m Village Hotels

The major backer of Pinewood Studios is among the suitors vying to buy Village Hotels, one of Britain’s biggest mid-market hotel chains.

Sky News understands Aermont, which specialises in real estate-backed investments, submitted an offer last week for Village Hotels, which is owned by KSL Capital Partners.

City sources said KSL was seeking offers worth in the region of £850m or more.

A number of other parties are also understood to have tabled bids ahead of a deadline last week.

Blackstone, the giant private equity firm, is considering making an offer but has yet to do so, according to insiders.

The auction is being handled by bankers at Morgan Stanley.

It comes months after attempts to sell Center Parcs UK were called off, while a mooted sale of Travelodge has so far failed to result in a deal.

Village Hotels comprises a portfolio of more than 30 properties from Aberdeen to Bournemouth, with rooms available at budget prices.

Founded in 1995 as Village Urban Resorts, the hotels feature pub-style restaurants and gyms.

KSL was reported to have paid £485m for the business when it bought it in 2014 from De Vere Group.

The Denver, Colorado-based buyout firm has also owned other UK hotel chains including Hotel du Vin and Malmaison.

Aermont and Blackstone declined to comment.

Business

Former Rank chief Birch in talks to run Ladbrokes-owner Entain

Published

2 days ago

May 11, 2024

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Former Rank chief Birch in talks to run Ladbrokes-owner Entain

Henry Birch, the former boss of Rank Group, is among the candidates vying to run Entain, the FTSE-100 owner of Ladbrokes.

Sky News has learnt that Mr Birch is one of a small number of candidates being considered by Entain to replace Jette Nygaard-Andersen as its permanent chief executive.

The recruitment process comes at a challenging time for Entain, which has been beset by boardroom upheaval and regulatory difficulties in various international markets.

Its stock has halved in the last year, leaving it with a market capitalisation of just under £5bn.

This weekend, sources close to the company confirmed that Mr Birch was a serious contender for the post, although they said others were also in contention.

An appointment could still be weeks or even a small number of months away, they added.

Mr Birch stepped down as chief executive of Very Group, the online retailer owned by the Barclay family, in 2022.

He is an experienced gambling industry executive, having spent four years as chief executive of William Hill Online prior to joining the London-listed multichannel gaming operator Rank Group.

He has also held roles at Leisure & Gaming plc and BettingCorp.

Under Mr Birch, Very Group broke the £2bn annual sales mark for the first time.

Investors in Entain have been pressing its board to recruit a new chief executive with substantial gambling experience as it grapples with a plunging share price and numerous regulatory and strategic challenges.

Last week, Sky News revealed that former bosses of bookies Coral and Skybet had rejected overtures to become its new boss.

Industry sources said that Dan Taylor, chief executive of Flutter Entertainment’s international operations, had also been approached, although it was unclear whether he was interested.

Entain has been under siege from activist investors for months.

In January, it announced that Ricky Sandler, who runs Entain shareholder Eminence Capital, would join its board as a non-executive director.

Last month, it said that Barry Gibson, its chairman, would retire later this year and be replaced by interim chair, and former acting CEO, Stella David.

Entain has hired bankers to sell PartyPoker and other non-core operations, which the Financial Times reported could include Netherlands-based BetCity, which Entain bought for £398mn last year.

As well as Ladbrokes, Entain owns Coral and a stake in BetMGM, a major US betting player.

MGM Resorts, the US casino operator behind the Bellagio in Las Vegas, attempted to buy Entain in 2021 but was rebuffed at a much higher valuation than the UK company’s shares trade at now.

MGM has since ruled out a further bid, although analysts expect it to return at some stage.

The company has faced a deluge of regulatory problems, triggering sharp criticism of its governance and business practices.

Last December, it was ordered to pay £615m for failing to prevent bribery at its former Turkish subsidiary under a deferred prosecution agreement.

Shares in Entain closed at 778.8p on Friday, giving the company a market capitalisation of £4.98bn.

Entain declined to comment, while Mr Birch could not be reached for comment.

Business

Motors.co.uk among suitors raiding stricken Cazoo’s garage sale

Published

2 days ago

May 10, 2024

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Motors.co.uk among suitors raiding stricken Cazoo's garage sale

A privately owned used-car platform is circling Cazoo Group, its stricken US-listed rival which is on the brink of administration.

Sky News has learnt that Motors.co.uk is a leading contender to acquire Cazoo’s marketplace operation, which would include its brand and intellectual property assets.

The process to auction the used-car platform’s constituent parts comes after it spent tens of millions of pounds on sponsorship deals in football, snooker and darts in a rapid attempt to gain market share.

Earlier this week, Cazoo filed a notice of intention to appoint Teneo as administrator, just three years after it floated in New York with a valuation of $8bn.

The filing was intended to provide protection from creditors while Teneo finalises asset sales.

Since an announcement last month about a restructuring of the group, advisers have offloaded a string of assets and unwound Cazoo’s previous operating model to transform it into a marketplace.

Among those have been the disposal of Cazoo’s vehicle fleet, which sources said had been achieved at higher-than-anticipated values, reflecting a current shortage of used cars in the market.

Teneo is also said to have struck a deal with Constellation Automotive, the owner of Cazoo’s rival, Cinch, involving a handful of sites and dozens of jobs.

Meanwhile, several parties are understood to have expressed an interest in Cazoo’s wholesale operation and other vehicle collection sites.

One industry source said the pivot to a platform model had seen its inventory rise to more than 15,000 cars, with Cazoo now the online vehicle marketplace where consumers can buy and sell cars under a single brand.

If, as expected, the group does fall into administration, it would underline the rapid implosion of a company which once ranked among Britain’s hottest technology start-ups.

Founded by Alex Chesterman, the founder of Zoopla, it raised hundreds of millions of pounds in funding, and rapidly attracted a ‘unicorn’ – or $1bn – valuation.

Mr Chesterman left the business several months ago in the wake of a balance sheet restructuring which saw hundreds of millions of dollars of debt converted to equity.

One insider said the formal triggering of insolvency proceedings was likely to attract wider attention in Cazoo’s assets, including its brand.

It was unclear on Friday how much Motors.co.uk or other suitors for the marketplace were likely to bid for it.

A spokesperson for Cazoo said: “Our new marketplace model, where consumers can both buy and sell cars, is revenue generating and performing ahead of expectations with interest from almost 100 car dealers including many household names wishing to trade on the Cazoo platform.

“Cazoo has successfully restructured and significantly reduced the cash burn of the group, resulting in a cash position in excess of £95m at 30th April 2024 compared to £113m at 31st December 2023, and the platform now has approximately 17,000 cars which is more than double the volume we previously supported and demonstrates the scalability of our technology and the strength of the team.

“We are making efforts to secure the next phase of our business and are grateful to our employees for their hard work and commitment.”

Motors.co.uk did not respond to enquiries, while a spokesperson for Cazoo declined to comment on talks about asset sales.