Ryanair to pay dividend from 2013

Ryanair will start paying a dividend to shareholders for the first time in its history from 2013, the company said yesterday.

The move signals the Irish budget airline's shift in strategy following the collapse of negotiations for the purchase of 200 new Boeing aircraft in December. Rather than the high-capital expenditure and high-growth approach it has followed since it was first floated in 1997, the group will return surplus money to shareholders through one-time payments at the end of its fiscal year.

At an investor meeting yesterday, Michael O'Leary, Ryanair's outspoken chief executive, confirmed the timetable for the changes. Some 112 Boeing aircraft will still be delivered between now and 2012, under an earlier agreement. But without the next big order, capital expenditure will decline from €1.2bn (£1.1bn) in the current year to €100m per annum by 2013.

"We expect our current cash reserves of €2.5bn to grow substantially by March 2013 and we plan to distribute surplus cash to shareholders from that date," Mr O'Leary said.

Ryanair's cut-price model has proved more resilient than most as recession has battered the airline industry. Figures published yesterday showed annual traffic up by 13 per cent to 65.3 million in 2009. The budget carrier last month flew 4.9 million people, 12 per cent more than in December 2008. "Ryanair remains on course to carry over 66 million passengers in the current fiscal year," Mr O'Leary said.

The group also categorically denied rumours that it is putting together a third bid for Aer Lingus, the beleaguered carrier majority-owned by the Irish government. Ryanair's first offer was made in 2006, when Aer Lingus held its initial public offering. A second approach was rejected last January. Aer Lingus shares lost 57 per cent of their value last year.