Ryanair to start paying regular divi: Profits soar as airline raises price of tickets

 Ryanair will start paying regular dividends to investors for the first time as it cashes in on higher prices and booming demand.

Europe’s largest airline yesterday said it will hand shareholders £350million over the next 12 months through an interim and final dividend.

That will land chief executive Michael O’Leary a windfall of more than £13million.

Ryanair – which until now has only ever returned cash to investors through share buybacks or special dividends – also pledged to dole out around a quarter of its annual profits to shareholders each year from 2025.

Ryanair bosses said this shift to scheduled dividends, as opposed to one-off payments, reflects the ‘maturity’ of the business and its recovery after the Covid pandemic.

On a high: Ryanair said it will hand shareholders £350m over the next 12 months through an interim and final dividend

‘It is a statement of our intent and a sign of our maturity as a business,’ said finance director Neil Sorahan.

It came as Ryanair became the latest airline to report booming demand for flights as the industry bounces back from Covid-19.

The airline flew a record 105m passengers in the six months to the end of September despite putting up prices. It expects passenger numbers to hit 183.5m over the full year.

Revenues rose 30 per cent to £7.5billion in the first half of the year while profits were up 59 per cent at £1.9billion.

The company now expects to rake in record annual profits of between £1.6billion and £1.8billion.

The update sent shares in Ryanair up 4.9 per cent in Dublin. London-listed rival Easyjet gained 1.2 per cent but British Airways owner IAG slipped 0.8 per cent.

‘We’re pleased to report strong half-year results due to a very strong Easter [and] record summer traffic,’ said O’Leary.

‘We think we are set for strong growth next year, both in terms of headline traffic numbers and underlying air fares during the peak period.’

Ryanair continues to cash in on higher fares with the average price of a Ryanair seat up 24 per cent on a year earlier to £50.

Revenue from add-ons for baggage, allocated seats and priority boarding ballooned 14 per cent to £2.1billion in the half year with passengers typically paying £20 each for these extras.

European regulators are currently looking at the recent rise in air fares across Europe which have led to soaring profits for the likes of Ryanair as well as Easyjet and IAG, which also owns Iberia and Aer Lingus.

Nonetheless, Ryanair cautioned its full-year targets are ‘highly dependent on the absence of any unforeseen adverse events’ such as further escalation of the war in Ukraine and Gaza.

It also faces a ‘significantly’ higher fuel bill this year. In the first half, the bill rose by £500million or 29 per cent to £2.4billion. 

Over the full year, Ryanair expects to pay an extra £1.1billion for fuel.

Victoria Scholar, an analyst at interactive investor, said: ‘It has been a tough few years for airlines with the pandemic that brought international travel to a standstill and pressures from cost inflation.

‘But airlines appear to be back in vogue after a particularly impressive summer performance.’

This post first appeared on Dailymail.co.uk