Ryanair, Europe’s largest airline by passenger numbers, has announced that it expects to achieve a record annual profit and will pay its investors a regular dividend for the first time. The airline experienced a significant increase in fares during the summer season, with a rise of 24%. This surge in fares contributed to the company’s strong financial performance, with a predicted after-tax profit of between 1.85 billion and 2.05 billion euros for the year ending in March. This surpasses Ryanair’s previous record profit of 1.45 billion euros in 2018.
Ryanair’s success can be attributed to its strategy of expanding its capacity at a faster pace than its competitors, allowing the airline to take advantage of the travel boom following the lifting of COVID-era restrictions. The airline carried a total of 105 million passengers in the first half of its financial year, representing an 11% increase compared to the previous year.
Group Chief Executive Michael O’Leary expressed satisfaction with the company’s half-year results, which he attributed to a robust Easter period and record-breaking summer traffic. In light of its financial success, the company has decided to declare an ordinary dividend policy, marking a significant shift as it has previously focused on special dividends rather than regular payouts.
Ryanair plans to allocate a maiden ordinary dividend of 400 million euros, which will be divided into an interim payment of 200 million euros in February and a final dividend of 200 million euros in September next year. Going forward, the airline intends to distribute approximately 25% of the after-tax profit from the previous year as an ordinary dividend in subsequent financial years.
Ryanair’s Chief Financial Officer, Neil Sorahan, expressed confidence in the company and stated that the third quarter is shaping up positively, with fares outperforming the previous year by a mid-teens percentage margin. However, the airline faces potential delays in the delivery of 10 out of its 57 Boeing 737 MAX aircraft, which were expected to be received by next summer. Sorahan confirmed that Ryanair is in regular communication with Boeing to resolve the situation.
In conclusion, Ryanair’s soaring summer fares have led to record-breaking financial results, creating an opportunity for the airline to pay its investors a regular dividend. The company’s strong performance and expansion plans position it favorably in the highly competitive aviation industry.
