Ryanair considers paying shareholders third special dividend in early 2015

Ryanair is considering paying shareholders a third special dividend for next year, according to chief executive Michael O'Leary.

Speaking after shareholders yesterday approved the airline’s plans to buy 175 Boeing 737 aircraft, worth €12 billion, Mr O’Leary said that Ryanair was considering paying a special dividend next year.

Ryanair does not pay annual dividends, but it has returned a total of more than €1.5 billion to shareholders in two special payments and share buybacks over the last six years.

If it goes ahead with a third special dividend, Mr O’Leary said it would be paid by the end of March 2015. He gave no indication of the likely amount, but the two earlier payments, in 2010 and 2012, totalled €983 million.

On June 4th it completed a small share buyback that was worth €56 million on the basis of that day’s €7.02 closing price in Dublin.

Answering questions from shareholders, Mr O’Leary said he would loathe to introduce annual dividends as the industry does not lend itself to such payments. “Like it or not, it’s cyclical, capital intensive and lumpy and bumpy.”

The 175 craft that Ryanair plans to buy are worth €12 billion at list prices but it has negotiated a similar discount with the US aircraft manufacturer to the one it achieved when it agreed to buy 100 planes, with an option for 50 more, in 2002 while the industry was still reeling from the September 11th attacks on New York.

At that point it was reported that the 100 craft had a catalogue price of $6 billion but Ryanair paid $5 billion. That implies a bill of less than €10 billion for the new order.

Mr O’Leary said the deal was being done at the bottom of the cycle, the point where demand for new craft was at its lowest.

It only recently took delivery of the last of the craft ordered 11 years ago.

Mr O’Leary said the new deal would increase the low-cost carrier’s fleet to more than 400 craft from 300 within two years, making it “the largest international airline in the world”.

Ryanair is expanding to exploit new opportunities for routes that it says are opening up across Europe. Mr O’Leary told the meeting that it was “inundated” with requests from airports around the continent, and even as far away as Israel and Russia, to open new routes.

Ahead of the meeting in Dublin Airport, he said the recent strike by French air traffic controllers had cost the airline “a couple of million”. He said the answer to what was annual industrial action by French air traffic control staff was to ban them from going on strike.

Commenting on the likelihood that the UK competition regulator will order Ryanair to sell part or all of its 29.9 per cent stake in local rival Aer Lingus next month, he said it was unlikely to happen as any bid by British authorities to force a sale would end up in court.