Ryanair will provide “modest” dividends for shareholders in 2024

Ryanair shareholders should not expect any blowout buybacks or special dividends from the airline going forward, Group Chief Executive Michael O’Leary has warned.

e said any future dividends will be “modest” even if the airline’s capital spending slows amid a reduced pace of fleet growth and renewal.

Ryanair returned more than €6.8 billion to shareholders between 2008 and 2020 through buybacks, a special distribution and special dividends. The largest single return was a €886 million buyback program between 2016 and 2017.

“If we have zero net debt by March 2024, I think we’re going to be looking at some shareholder returns at that point,” Mr O’Leary told analysts on Monday when the airline released third-quarter results.

Ryanair raised €400m from shareholders during the pandemic, which Mr O’Leary described as “crucial” along with bond refinancing to help the airline weather the crisis without having to resort to state aid.

“We have huge cash withdrawals this year,” he added. “We have a bond redemption of 850 million euros in March, 750 million euros in August. We have – subject to Boeing deliveries – we think next year we probably have about €2.3 billion, €2.4 billion in capex.”

Mr O’Leary said the airline was looking to restore pay to its staff and keep airfares as low as possible.

“But once all of this is done and we see a clear path to getting back to a zero net debt position on the balance sheet, we will return to shareholder returns, but we’re probably looking to spring 2024 before we start, so keep that in mind,” added the airline boss.

But he cautioned investors about the potential size of such returns.

“I think shareholder returns will be more modest going forward,” he said. “I don’t think we’re going to do any more buybacks. I think we’re expecting modest dividends…hopefully on an annual basis when earnings and cash flow permitting.”

He said the airline’s large share buybacks “had proven difficult in the past” and that a “modest dividend stream” was better.

Ryanair said on Monday it had made an after-tax profit of 211 million euros in the three months to the end of December, boosted by strong demand over the period.

The performance was compared to a loss of €96m in the corresponding period of the previous financial year when weighed down by the impact of the Omicron variant of the Covid virus.

Ryanair had pointed to strong demand during the Christmas season in recent weeks and previously revised its profit forecast for the current financial year upwards.

The airline said its passenger volume rose 24 percent to 38.4 million in the third quarter, up 7 percent from the corresponding period in fiscal 2020.

Tariffs in the third quarter rose 14 per cent compared to pre-Covid levels, it said.

Ryanair’s revenue from scheduled services rose 85 percent to 1.45 billion euros in the third quarter. Total revenue for the quarter rose 57% to €2.31 billion as ancillary revenue delivered a “solid performance.”