Ryanair sees record annual profit, first regular dividend as fares soar

Ryanair (RYA.I) on Monday forecast a record annual profit and promised to pay investors a regular dividend for the first time after fares soared 24 per cent during the summer season.

Europe’s largest airline by passenger numbers said it expects an after-tax profit of between 1.85 billion and 2.05 billion euros for the year to end-March, easily beating its previous record of 1.45 billion euros in 2018.

The low-cost pioneer earned 2.18 billion euros in the six months to the end of September, the first half of its financial year, 59 per cent ahead of its previous record for the period, set last year.

The Irish airline has been increasing capacity far faster than most rivals to take advantage of the travel boom that followed COVID-era lockdowns. The 105 million passengers flown in the period was 11 per cent higher than last year.

“We’re pleased to report strong half year results … due to a very strong Easter, record summer traffic,” Group Chief Executive Michael O’Leary said in a video presentation.

“The board … also believes now is an opportune time to declare an ordinary dividend policy,” he added. While the airline has in the past paid special dividends, it has always avoided promising a regular payout.

A maiden ordinary dividend of 400 million euros will be split between an interim payment of 200 million euros in February and a final dividend of 200 million euros in September next year.

For subsequent financial years Ryanair plans to return approximately 25 per cent of the after-tax profit posted the previous year by way of an ordinary dividend, the airline said.

“It’s a strong vote of confidence in the company,” Chief Financial Officer Neil Sorahan said in an interview.

Sorahan said Ryanair’s third quarter was looking “relatively good” with fares ahead of last year by a “mid-teens” percent margin.

He said the airline has no real visibility for the final quarter, to March 31, but that easing inflation in Europe was a good sign. “I think the consumer is going to continue spending,” he said.

He said he was concerned that up to 10 of the airline’s 57 Boeing 737 MAX aircraft due to be delivered by next summer may be delayed until next winter, but that the situation around delayed deliveries was 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 said.