Saturday 24 February 2018

Ryanair shareholders set for e1bn windfall in 2013

O'Leary dismisses rumours of another bid for Aer Lingus

John Mulligan

Ryanair is likely to return as much as €1bn to shareholders in 2013 and has again ruled out a third bid for Aer Lingus following fresh speculation last week that such a move was under active consideration.

Chief executive Michael O'Leary said there was "no truth or basis" to claims made in recent days that the airline was actively considering mounting a third assault on Aer Lingus following two failed takeover attempts to date.


A moratorium imposed on Ryanair last year under takeover rules from pouncing again on Aer Lingus expires at the end of this month.

In the absence of any decision by the Government to sell its 25.1pc stake in Aer Lingus, Ryanair said a fresh bid remains "highly unlikely". Ryanair owns almost 30pc of Aer Lingus.

Speaking to investors via telephone yesterday after a planned London meeting had been postponed due to inclement weather, Michael O'Leary further outlined plans for returning cash to shareholders after talks with Boeing to buy up to 200 new aircraft, valued at roughly $14bn, acrimoniously collapsed last month. That prompted Mr O'Leary to announce that he'll at least rein in Ryanair's medium-term expansion plans post-2012 once the current order book of aircraft is fulfilled.

It's likely Ryanair will wait for another down-cycle in the industry a few years from now before attempting to secure any new aircraft deal.

Still, Ryanair will grow by about 50pc between now and 2013. By then, it will be generating significant amounts of surplus cash as its capital expenditure demands fall sharply from about €1.2bn to €100m per annum.

Mr O'Leary has already said that he will return money to shareholders via special dividends and possibly share buybacks, but that he won't let the company be tied to a dividend stream.

He reiterated those comments yesterday. Mr O'Leary owns almost 5pc of Ryanair and will be a significant beneficiary of any cash return.

He previously indicated to the Irish Independent that he expects the carrier to have north of €4bn in cash on its books after 2012.


Speaking to investors, Mr O'Leary provided what analyst Joe Gill at Bloxham Stockbrokers described as "line of sight" for shareholders.

There were also indications that Ryanair's yields -- the average ticket price paid per passenger -- could deliver very modest recovery between now and 2012. They've fallen between 15 and 20pc in the past year as Ryanair slashed fares to lure cash-strapped consumers.

Mr Gill said that shareholders would probably be disappointed if Ryanair was now to launch a new bid for Aer Lingus after confirming its plans to return cash to them.

Shares in Aer Lingus fell 2.7pc yesterday to 63c, while Ryanair declined 2pc to €3.47.

Irish Independent

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