A record-breaking summer for Ryanair helped it land half-year profit of £1.9 billion today and announced its first ever regular dividend pay-out for investors.
The Irish low-fare airline – famed for its tight management of refund for passengers – said it would hand back €400 million (£345 million), to shareholders. The maiden dividend will be split evenly at €0.35 per share between February and September next year.
It comes after Ryanair’s strongest ever peak summer getaway season. Revenues rose 30% to €8.58 (£7.4 billion), as demand came roaring back from sun seekers and holiday makers, with Covid travel restrictions left behind. The headline profit figure was up 59% to €2.2 billion.
The company, which has its London hub at Stansted Airport, added six new destinations from there for the summer. It flies to 180 places from the capital, also from Gatwick and Luton. Overall, it opened up 194 new routes in the third quarter, which covers the summer. In August, it carried 18.9 million people, a traffic figure up 11% year-on-year, across its largest ever schedule, with 96% of the available seats filled.
Ryanair chief executive, Michael O’Leary, hailed his company’s “investment in resilience” into the peak travel season in the summer, which included “increased crew ratios, doubling the capacity of our Dublin and Warsaw ops centres, enhanced day-of-travel app. and continuously improving live customer comms.”
That helped overcome what he called “significant ATC [air traffic control] disruptions this year”.
O’Leary repeated his call for “urgent reform of Europe's inefficient ATC system”, calling it “one of the most significant environmental initiatives the EU can deliver,” with some countries prioritising domestic flights during strikes, meaning diversions for international services.
“In 2023, French ATC has (so far) inflicted over 60 days of strikes on our sector, during which the French Govt. use minimum service laws to protect local/domestic flights while disproportionately cancelling overflights,” said O’Leary.
Looking toward the Christmas travel season, Ryanair described forward bookings as “robust”, but said European air traffic capacity was expected to run at only 94% of pre-Covid levels. Higher fuel costs and some potential delays over the delivery of its new Boeing 300-MAX 10 planes were factors likely to affect its full-year traffic figure, which it still expects to reach 183.5 million, up 9%.
But potential delays to the delivery of new aircraft could also be a factor into next summer. Ryanair revealed that it was “concerned” that up to 10 of the 57 it expects before then “may be delayed until winter 2024.”
Looking even further ahead, O’Leary set Ryanair on course for regular dividends. The company pledged to pay out “approx. 25%” of its annual profit to shareholders from now on, as well as any surplus cash through special dividends or stock buybacks. It will take ”prevailing market conditions” into account and ensure it retains "a prudent level of cash to fund debt and capex requirements.”
He also pointed to potential dealmaking after the pandemic: “We expect European airlines will continue to consolidate over the next 2-3 years, with the takeover of ITA (Italy) and the sale of TAP (Portugal) and SAS (Scandinavia) already underway.”
Russell Pointon at the investment research group Edison said “Ryanair's first-half financials have taken off … the outlook for the year is cautiously positive despite potential winter losses and limited visibility on the fourth quarter.”
Ryanair’s London-listed shares rose 92p to 1420p, a rise of of over 7%.
