Ryanair Plans First Regular Dividend Amid Record Profits

Ryanair, Europe’s largest airline by passenger numbers, announced on Monday that it would pay a regular dividend to its shareholders for the first time, as it forecast a record annual profit driven by a surge in air fares.

The low-cost carrier said it expected to make an after-tax profit of between €1.85 billion and €2.05 billion ($2.1 billion and $2.3 billion) in the fiscal year ending in March 2024, surpassing its previous record of €1.45 billion in 2018.

The company attributed its strong performance to a 24 percent increase in average ticket prices to about €58 ($66) in the six months through September, as demand for international travel rebounded after the pandemic-induced slump. Ryanair also benefited from a strong Easter season, record summer traffic and lower operating costs.

Ryanair said it planned to pay an interim dividend of €200 million ($227 million) in February and a final dividend of €200 million in September next year, subject to shareholder approval. After that, the company said it would return about a quarter of its annual post-tax profits to shareholders each year.

The dividend announcement marks a shift in Ryanair’s strategy, as the company has previously paid only special dividends on four occasions, the last one in 2019. Ryanair’s chief executive, Michael O’Leary, said the decision reflected the company’s confidence in its future growth prospects and its gratitude to its shareholders, who invested €400 million ($454 million) in September 2020 to help the company weather the crisis.

Ryanair also raised its full-year traffic forecast to 225 million passengers, up from 200 million previously, as it expects to benefit from the easing of travel restrictions in Europe and the UK. The company said it was well positioned to take advantage of the recovery in the aviation sector, as it has a large fleet of fuel-efficient aircraft, a low-cost base and a strong balance sheet.

However, Ryanair also warned of several risks and uncertainties that could affect its outlook, such as the geopolitical tensions in Ukraine and Gaza, the rising fuel prices and the ongoing legal challenges from its competitors and unions.

Analysts welcomed Ryanair’s results and dividend plans, saying they reflected the company’s resilience and competitive advantage in the European market. Victoria Scholar, the head of investment at Interactive Investor, said: “Ryanair has been able to pass on additional cost pressures to consumers through higher airfares with ticket prices likely to continue to go up next year.”