Ryanair yesterday confirmed it had spent almost €40 million buying back as many as eight million of its own shares.

The airline paid just under €4.95 each for the shares, which represent about 0.5 per cent of the total issued share capital. The stock purchased by Ryanair in the buyback exercise will be cancelled.

This is the first stage of a planned buyback announced by the company at the publication of its annual results earlier this month. Ryanair said it planned to spend as much as €300 million acquiring shares equal to almost 4 per cent of the company.

Analysts said the buyback highlighted the strong financial position of the company, which had net cash of €336 million at the end of March.

Buying back shares is seen as a way of returning cash to shareholders as it reduces the number of shares in issue and therefore increases the value of those remaining.