Ryanair Holdings (NASDAQ: RYAAY), Europe’s biggest low-cost airline, plans to pay its first regular dividend after profits soared to record levels. The company announced plans to pay a €400mn ($430mn) dividend to shareholders after posting a profit of €2.2bn profit in the six months ended September 2023, up 59% year-over-year.

Ryanair had its busiest-ever summer this year, ferrying 105 million passengers between April and September. It cashed in on strong travel demand and rising airfares to post record profits.

• Airfares have risen significantly this year due to extraordinary demand since the Covid pandemic and increasing jet fuel costs. The 2020 pandemic battered the global airline business, and many carriers have struggled to add capacity.

• Ryanair took the opposite path and significantly expanded its capacity; it flew 25% more passengers between July and September this year than in 2019, the year before the pandemic. Meanwhile, European airline capacity has reduced by 7% overall from 2019 to date, according to government agency Eurocontrol.

Ryanair expects between €1.85bn and €2.05bn in profits for its fiscal year ending March 2024. The company plans to return 25% of the prior year’s profit to shareholders as ordinary dividends. Between 2008 and 2020, it returned over €6bn to shareholders, but through share buybacks and special dividends. It’ll pay an ordinary dividend for the first time, split into two €200mn tranches in February and September 2024.

Ryanair warned of significantly higher fuel costs; it expects to pay €1.3bn more for fuel this fiscal year than the previous. The company also cautioned that its profit forecasts were “highly dependent on the absence of any unforeseen adverse events (for example such as Ukraine or Gaza) between now and the end of March 2024.”

• Ryanair’s stock rose 1% on Monday after announcing its first ordinary dividend. The company has a market capitalization of nearly €19bn.

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