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Ryanair, a prominent player in the industrial sector, has significantly enhanced its share buyback initiative by an additional €800 million, reflecting a more robust cash position than previously anticipated. This move comes despite a greater-than-expected softening in airfares. The company reported that strong traffic growth and delays in Boeing aircraft deliveries have positively impacted cash flows, allowing for this expansion.
The airline is set to complete its existing €700 million share buyback by the end of August. The new extension increases the total anticipated buybacks for the financial year ending March 2025 to €1.5 billion. This figure represents 15% of the company’s issued share capital. Approval from shareholders is required for this increase, with a vote scheduled for the annual general meeting on September 12.
Ryanair (LSE:0RYA)'s decision to expand its buyback program is influenced by its projected cash flow during a period without new aircraft deliveries, from mid-2025 to mid-2027. The company expects that the temporary suspension of aircraft capital expenditures will provide a short-term boost to cash flow. This boost enables Ryanair to extend shareholder returns, a practice that has seen the company return approximately €8 billion to shareholders over the past 15 years, including dividends. Notably, over 30% of its shares have been repurchased during this period.
The carrier’s management highlighted that despite the softer airfare environment, the overall cash flow situation remains strong due to the factors mentioned. The delays in aircraft deliveries have played a significant role in allowing Ryanair to allocate funds towards increasing shareholder returns.
Ryanair's latest move to boost its share buyback program underscores its solid financial position and the company's commitment to returning value to its shareholders. The additional €800 million allocation brings the total buyback amount for the current financial year to €1.5 billion, demonstrating the company's confidence in its cash flow and its strategy to enhance shareholder value.
