Ryanair investors may have to wait a year for cash returns, says Michael O’Leary

Ryanair investors may have to wait a year before the airline begins returning cash to them but Michael O’Leary said the carrier is hopeful that dividends and buybacks will start again in its next financial year.

Speaking to reporters following the group’s annual general meeting (agm) on Thursday, the chief executive also accused residents around Dublin Airport who have made noise complaints following the opening of the north runway of “making a big dog-and-pony show” about the issue.

Shareholders unanimously approved the airline’s plan to buy 300 Boeing 737 Max aircraft at the meeting in Dublin. Thanking them, Mr O’Leary said the additional aircraft would increase Ryanair’s fleet from about 560 aircraft to 800 over the next decade.

While the new orders have a list price tag of more than $40 billion (€37 billion), he said Ryanair would be paying substantially less than that. Orders for half of the 300 aircraft are locked in but the group has options on the other half, meaning it can “stop the deliveries” if a crisis affecting the industry reduced demand for air travel.

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As reported in The Irish Times last week, Mr O’Leary said Ryanair was “actively considering” reviving cash returns to shareholders.

The airline returned €6.8 billion to investors through share buybacks, a special distribution and special dividends between 2008 and 2020, but payouts have been on hold since then as the carrier grappled with the pandemic. It never paid a regular dividend. Airline executives hinted to analysts at an investor day last week that the airline may adopt a policy of a “modest regular dividend” in coming years.

[ DAA’s €75m bid for land between runways rejected by owners ]

Mr O’Leary said the airline will begin returning cash to investors “when it is prudent to do so”, likely to be “some time” in its 2025 financial year, which begins in April 2024, but possibly before then.

With €4.8 billion in cash on its books, he said pay restoration and increases for staff and management was the top priority for the airline, followed by the repayment of maturing debt as it falls due over the coming years and the capital expenditure commitments associated with the new aircraft orders.

After that, he said the group would again look at returning cash to shareholders through dividends or share buybacks, which he said was a matter for the board.

Mr O’Leary also said the DAA, the operator of Dublin Airport, should buy the 105-hectare site between the two runways that is currently up for sale but that the €200 million price tag being quoted was “hopeful”.

[ Owners of ‘strategic’ land at Dublin Airport say they plan to sell to ‘international fund’ ]

He said Ryanair had no interest in buying the plot that Ulick and Des McEvaddy and three co-owners have brought to market.

“Dublin is an important airport for us,” Mr O’Leary said, “but it’s not that important.” He said the airline had been “very disciplined” over the years about “not getting into land speculation”.

The Ryanair boss said he believes DAA should acquire the site, adding that there is “only one buyer in town” at the prices currently being reported.

While they hoped to attract bids of more than €200 million, Ulick McEvaddy last week described a bid of €75 million from the DAA as “derisory”.

[ Night time flight restriction order at Dublin Airport ‘idiotic’, says Ryanair ]

On noise complaints at Dublin Airport, Mr O’Leary said he had no sympathy for residents of the area near the airport who have made complaints in recent times. “Most of them work for Ryanair,” he said, adding: “They are making a big dog-and-pony show about aircraft that are materially quieter than they used to be 20 years ago.”

He also strongly criticised the DAA for its handling of issues around parking at the airport this summer and plans to increase airport charges for passengers. He said its chief executive, Kenny Jacobs, Ryanair’s former chief marketing officer, would be better off “going back to what he learned at Ryanair, which is that lowering prices increases volume and raising prices doesn’t”.