Aer Lingus to pay dividend

SHAREHOLDERS IN Aer Lingus are to be rewarded with a dividend for the first time since the airline floated in 2006.

Aer Lingus yesterday announced it would pay a 3 cent final dividend for last year and for the 2012 and 2013 financial years provided the airline makes an operating profit.

The dividend will amount to a payout of just under €16 million from the airline this year.

“The board believes that this dividend represents a reasonable proportion of profitability, and will not be detrimental to Aer Lingus’s financial strength,” chairman Colm Barrington told shareholders at the company’s agm in Dublin yesterday.

Among them was Ryanair’s chief financial officer Howard Millar, who criticised the dividend as “paltry”.

“A special dividend of €50 million would be more appropriate,” he said, in light of Aer Lingus’s €1 billion cash pile and the absence of any major capital expenditure plans.

Mr Barrington said the dividend question had been considered in detail by the board. “Special dividends actually do very little for shareholders in the long run. A sustainable dividend policy is much more valuable for shareholders.”

Shares in Aer Lingus closed down 1.5 per cent yesterday at €0.975, with some analysts suggesting shareholders may have viewed the payout as too conservative.

EasyJet and Ryanair, which paid its first dividend in 2010, have both indicated plans to pay special dividends this year.

On the subject of Etihad’s acquisition of 3 per cent of the company, Mr Barrington said the Middle Eastern airline had “great regard for Aer Lingus, the brand, the management. any interest in breaking up or acquiring slots.”

Mr Millar said Etihad “is not the answer as they can only buy 50 per cent of the company”. Aer Lingus’s independence strategy was now “in tatters” as it would be under the control of two airlines.

Commenting on the airline’s operating performance, chief executive Christoph Mueller told shareholders that there had been strong growth on all its north Atlantic routes, with “significant improvement” in its Shannon route since ceasing operations during its three loss-making months.

This week Aer Lingus reported a loss of €36.1 million for the first quarter of this year. This was a 38 per cent improvement on the same period in 2011, which was adversely hit by industrial action that cost the airline €15 million.