Ryanair is to pay a dividend to shareholders for the first time since it floated on the stock market in 1997. The company says it plans to distribute €500m to shareholders.
The move helped lift its share price, which gained 4.4% to close at €3.53 in Dublin this evening.
The airline this morning reported pre-tax profits of €341m for the year to the end of March. This compares to a loss of €180m last year due to the airline writing down the value of its 30% stake in Aer Lingus.
Revenue for the year rose by 2% to €2.988 billion, while revenues from ancillery activities grew by 11% to €664m.
The airline also reported a more than 200% increase in after tax-profits for last year to €319m. The figure was ahead of expectations.
The airline said it expected air fares to increase by between 5% and 10% this year, after a fall of 13% last year.
During its financial year, Ryanair carried 66.5 million passengers, up 14% on its previous year. The airline said that while ticket prices had fallen 13%, its costs fell by almost one fifth because of lower fuel and tighter cost controls.
Ryanair said traffic had fallen at many European airports because of the recession and it was being 'inundated with offers from large and small airports competing with lower costs and efficient facilities to win Ryanair's growth'.
With the exception of Dublin and Stansted, Ryanair said the costs of using airports had fallen giving an average airport and handling cost reduction of 9%.
Ryanair still counting cost of ash cloud disruption
The volcanic ash cloud from Iceland led to the cancellation of 9,400 Ryanair flights and the loss of up to 1.5 million passengers up to May 18. Ryanair said in the 18 days from the middle of April there were 'repeated, unnecessary, closures of large swathes of European airspace'.
It said the full cost of the cancellations would not be known for some time as it was expecting compensation claims under what the airline said were 'disproportionate and discriminatory' EU regulations. Ryanair said it did not believe that the airline should be exposed to such unlimited liability.
It said it estimates the cumulative exceptional cost of the 'unnecessary cancellations' is about €50m and added it will continue to update shareholders on a quarterly basis on the likely final outcome.
The airline said it had ended discussions on an aircraft order with Boeing and arising from that would generate surplus cash up to the end of its 2013 financial year. Ryanair said that facilitated a once off dividend in October, subject to shareholder approval, worth €500m. It said a further dividend may be paid before the end of its 2013 financial
year.
During the year, the airline opened eight new bases in Europe - at Bari, Brindisi, Faro, Leeds, Oslo Rygge, Pescara, Porto and Trapani - to bring the total to 42. It also started operating 284 new routes.
Fuel costs fell by 29% to €894m as oil prices fell from $104 to $62 a barrel. It said it was extending its hedging programme to 90% for the fiscal year 2011 at $730 per tonne.
Ryanair said it expected to grow traffic by 11% this year, the volcano permitting, but fuel costs would increase by €300m. It said airfares would rise by between 5% and 10% this year. All going well, it said that profits this year would rise by between 10% and 15% to a range of between €350-375m.
'We can be proud of delivering a 200% increase in profits and traffic growth during a global recession when many of our competitors have announced losses or cutbacks, while more have gone bankrupt including Bluewings in Germany, Globespan in the UK and My Air in Italy,' commented Ryanair CEO Michael O'Leary.
