Ryanair, Europe’s largest airline in terms of passenger numbers, has made an optimistic forecast of achieving a record annual profit and has committed to paying regular dividends to investors for the first time. This announcement comes in the wake of a significant 24% increase in ticket prices during the summer season.
The airline expects to secure an after-tax profit ranging between 1.85 billion and 2.05 billion euros for the fiscal year ending in March, surpassing its previous record of 1.45 billion euros recorded in 2018.
Ryanair, known for its pioneering low-cost approach, reported earnings of 2.18 billion euros for the first half of its financial year, which concludes at the end of September. This figure represents a substantial 59% surge compared to the previous year’s record for the same period.
The Irish airline has outpaced its competitors by expanding its capacity at a rapid pace, capitalizing on the resurgence in travel following the lockdowns of the COVID-19 era. In the reported period, Ryanair transported 105 million passengers, marking an 11% increase from the previous year.
Group Chief Executive Michael O’Leary expressed his satisfaction with the robust half-year results, attributing them to a robust Easter season and record-breaking summer traffic. He also announced a significant shift in the company’s financial policy, stating, “The board … also believes now is an opportune time to declare an ordinary dividend policy.” Although Ryanair has previously issued special dividends, it had refrained from committing to regular dividend payments.
The airline’s inaugural ordinary dividend, amounting to 400 million euros, will be distributed in two installments: an interim payment of 200 million euros in February and a final dividend of 200 million euros in September of the following year.
For future fiscal years, Ryanair has outlined its plan to allocate approximately 25% of the after-tax profit reported in the preceding year as an ordinary dividend.
Chief Financial Officer Neil Sorahan hailed this move as “a strong vote of confidence in the company.” Sorahan reported that the airline’s third quarter is showing positive signs, with fares exceeding the previous year’s figures by a “mid-teens” percentage margin.
Looking ahead to the final quarter ending on March 31, Sorahan acknowledged the lack of visibility but noted encouraging signs due to easing inflation in Europe. He expressed optimism about consumer spending, stating, “I think the consumer is going to continue spending.”
Sorahan did voice concerns regarding potential delays for up to 10 of the 57 Boeing 737 MAX aircraft scheduled for delivery by next summer. Nevertheless, he mentioned that the situation concerning these delivery delays was gradually improving. “We’re in weekly calls with them (Boeing) at the moment. It’s a fairly fluid situation. It’s starting to get better at this stage, but more to go,” Sorahan remarked.
