Ryanair Holdings Plc will pay out a dividend of €400 million ($430 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 in the fiscal first half and said on Monday that full-year profit will be in a range of €1.85 billion to €2.05 billion. Ryanair also said that it might pay out special dividends and institute stock buybacks in future. The stock rose as much as 8.3%, the most in almost 20 months. 

At the same time, the budget carrier cautioned that a significantly higher fuel bill and delays with deliveries of Boeing Co. 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.”

Ryanair’s efforts to capture an even bigger slice of the market has been frustrated by Boeing’s struggles to deliver aircraft because of supplier issues. As many as 10 of the 57 Boeing 737 Max planes expected for summer 2024 may be delayed until winter next year, Ryanair estimated on Monday, forcing the airline to reconsider its traffic expansion plans.  

“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 on a call. 

Speaking on Bloomberg TV, Chief Executive Officer Michael O’Leary said is company will remain a “proud” customer of Boeing, while faulting the US planemaker’s crisis management. O’Leary said he’s speaking with Boeing CEO Dave Calhoun on a weekly basis, and that while supplier Spirit Aerosystems Holdings Inc. is at the heart of the latest glitches, Boeing is also partly to blame. 

“There isn’t enough focus there on a daily basis, everyone is wringing their hands,” O’Leary said in the interview.

Ryanair surged as much as €1.27 to €16.47, the biggest gain since March 2022. The stock has gained 34% this year.

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. 

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

The €400 million dividend equates to what Ryanair shareholders invested in the peak of the Covid-19 pandemic so the company can now refund them, Sorahan said in an interview on Bloomberg TV following earnings.

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Alex Irving, analyst at Bernstein, said the dividend had been hinted at for a few months and there was room to do more over time on about €2 billion run rate free cash flow and net cash balance sheet. Cash generation should still exceed payouts, he added.

Sorahan said during the call that 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.