Ryanair UK: budget airline plans regular payouts to shareholders as firm’s profits surge to £1.8bn

Budget airline Ryanair has “taken off” as soaring ticket fares helped the carrier net a record €2.18bn (£1.8bn) half-year profit. The carrier announced this morning (Monday 6 November) that it expects to notch up profits of between €1.85bn (£1.6bn) and €2.05bn in the financial year to the end of March, far outstripping its previous highest profit of €1.45bn in 2018.

Its revenues rose by nearly a third to €8.6bn for the six months to 30 September on the back of a 24 per cent jump in ticket fares as the post-pandemic boom in demand for travel helped the airline. The firm’s half-year earnings of €2.18bn were also up 59 per cent, breaking a prior record set last year.

The company said it is now planning to pay regular dividends to its shareholders for the first time ever. The airline has paid special dividends before but never committed to regular payouts.

It plans to pay out regular dividends kicking off with an interim payment of €200m in February and a final dividend of €200m in September next year. After this, Ryanair plans to hand about a quarter of its annual profits back to shareholders each year.

Its chief executive, Michael O’Leary, noted that shareholders had invested €400m during the pandemic, in September 2020, allowing the firm to borrow €850m through a low-interest bond. He said now was the “opportune time to declare an ordinary dividend policy”.

Despite the firm’s results, O’Leary noted there are issues in the form of rising fuel costs, Boeing delivery delays - as well as Europe’s “inefficient” air traffic control system. He said: “While Boeing are currently suffering delivery delays with Spirit – their fuselage supplier – we are working with them to minimise delays ahead of peak summer 2024.  At this stage, we are concerned that up to 10 of our 57 contracted gamechanger deliveries pre summer may be delayed until winter 2024.” He added that Ryanair’s annual financial performance “remains highly dependent on the absence of any unforeseen adverse events – for example such as Ukraine or Gaza – between now and the end of March”.

Russell Pointon, director at Edison Group, said Ryanair’s “first-half financials have taken off showing a strong industry rebound as airlines continued to recover post the pandemic.” He added: “This performance reflects the airline sector’s recovery post-pandemic though it will be worth watching the airline industry’s response to the EU’s probe into rising airline costs”.

Ryanair’s huge profits and payouts to shareholders comes after it had to cancel 350 flights because of the air traffic control systems failure in the UK over the August bank holiday. The firm was also ranked as the European airline with the biggest ‘hidden fees’, with the price of a basic ticket increasing by 344% with add-ons according to research. Data compiled by UK-based voucher and deals websiteNetVoucherCodes showed that the price of an £18.39 fare for a short haul flight with the Irish airline jumps by £63.28 to £81.67. The add-ons include options such as a 20kg checked bag, carry-on luggage upgrades, seat selections, fast track at the gate and insurance.