Ryanair Holdings will pay out a dividend of 400 million euros (S$580.2 million) and plans to hand over about a quarter of annual profit to shareholders as Europe’s biggest discount airline benefits from growing traffic.

The airline reported profit of 2.18 billion euros in the fiscal first half and said on Monday (Nov 6) that full-year profit will be in a range of 1.85 billion euros to 2.05 billion euros. Ryanair also said that it might pay out special dividends and institute stock buybacks in future. 

At the same time, the budget carrier cautioned that a significantly higher fuel bill and delays with deliveries of Boeing aircraft are having adverse effects. The extra cost for kerosene means that Ryanair is “unlikely” to replicate the performance of last year’s fiscal third quarter, Ryanair said, while visibility into the traditionally weak fourth quarter remains “very limited.”

As many as 10 of the 57 Boeing 737 Max planes expected for summer 2024 may be delayed until winter next year, Ryanair said. The airline has expressed frustration over delivery delays, which has forced the carrier to pare back its winter schedule. 

“The worst case scenario is that we’ll end up with growth of 47 aircraft next summer instead of 57,” chief financial officer Neil Sorahan said in an interview.

Ryanair expects capacity to remain constrained, partly as airlines across Europe consolidate, and in part because maintenance on the latest-generation Pratt & Whitney engines keep more single-aisle planes on the ground in the next two years. Those factors will help drive the competitive advantage at the airline, which predicted passenger growth to reach 300 million by the middle of next decade. 

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Total operating costs rose 24 per cent to 6.16 billion euros, which Ryanair attributed to a higher fuel bill that jumped by 29 per cent to 2.8 billion euros. While the airline has hedged 85 per cent of its fuel at about US$89 a barrel for this fiscal year, it said unhedged fuel costs were significantly more expensive.

Sorahan said the second half of the year is traditionally less profitable because fewer people go on holiday during the winter months. Despite this, he said Christmas bookings are strong.

“We’re looking at a very strong year above consensus on a full-year basis,” he said. BLOOMBERG