Ryanair to Shift Focus of Growth from Fleet to Shareholders’ Dividend

Boeing seems to have lost a large order for the moment when the on-going negotiations with Ryan-air for 200 aircrafts fell through. The manufacturer was supposed to supply these 200 aircrafts between 2103 and 2016, increasing the Ryanair fleet strength. As stated by Michael O'Leary, Chief Executive of Ryan-air, the problem lay with "a bunch of numpties out in Seattle" who he says couldn’t come to a decision.

Ryanair is renowned no-frills passenger airline, known for its fast growth. Now however, this strategy is under revision. Mr. O’Leary reiterates, "We will focus our efforts on maintaining Ryanair's strong traffic and new route growth into 2010 and we look forward to briefing shareholders in the first quarter of the New Year with a revised strategy". The growing cash situation is most likely going to be used to pay out ‘special dividends’ to the shareholders with effect from 2012.

The reason for the fall through of negotiations is reportedly not cost but expected discounts and delivery conditions according to Ryanair, though Boeing disagrees.

An interesting I-told-you-so comment came from Ryanair’s competitor, EasyJet’s founder, Sir Stelios Haji-Ioannou, “The era of endless fast growth and ever larger aircraft fleet is near its end. Using shareholders' funds to finance profitless growth by buying more and more aircraft from Boeing and Airbus is no longer acceptable”.