Ryanair announced that it anticipates posting a record annual profit and that it will pay investors a dividend on a regular basis for the first time. The airline cited summer pricing increases of 24% that are expected to stay high for years due to capacity constraints.
The airline, which is the busiest in Europe in terms of passengers, saw a 5% increase in share prices after closing.
Ryanair easily surpassed its previous record of €1.45 billion in 2018, predicting an after-tax profit for the year ending in March of between €1.85 billion and €2.05 billion.
Group CEO Michael O'Leary stated today, "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."
In order to capitalise on the travel boom that followed the Covid period lockdowns, Ryanair has been expanding capacity significantly quicker than other competitors. Between July and September of this year, the airline flew 25% more people than in 2019.
Eurocontrol, the organisation that oversees European airspace, reports that overall capacity in Europe decreased by 7% during the same time compared to 2019 levels.
According to Michael O'Leary, limited output by aeroplane manufacturers will limit capacity until 2030, while issues with Pratt & Whitney engines would probably limit capacity deployed by competitors who operate Airbus jets next summer.
Ryanair announced that it will pay an initial regular dividend of €400 million the next year, and that it will return roughly 25% of its after-tax profit as an ordinary dividend in the years that follow.
Neil Sorahan, chief financial officer of Ryanair, called the dividend policy a "strong vote of confidence in the company".
In the first half of its financial year, which ended at the end of September, Ryanair made €2.18 billion, 59% more than its previous record for the same period.
Ryanair's "relatively good" third quarter, according to Neil Sorahan, saw fares surpassing those of the previous year by a "mid-teens" percentage.
Although there isn't much hope for the final quarter ending in March, he noted that decreasing inflation in Europe is encouraging.
Although Sorahan stated that things were getting better, Ryanair is worried that up to 10 of the 57 Boeing 737 MAX planes that are scheduled to be delivered to the airline by next summer may not arrive until next winter.
"Right now, we're having weekly calls with Boeing. It's a somewhat flexible circumstance. Even if there is still work to be done, things are beginning to improve "explained Sorahan.