EasyJet is to raise the payout ratio for the ordinary dividend for shareholders from one third of profit to 40% of profit after tax.
The boost to shareholders will come from the financial year ending September 30.
Further details of the ordinary dividend will be announced with the full year results on November 18 and be subject to shareholder approval at the budget carrier’s agm on February 12. It will be paid to shareholders in the early part of calendar year 2015.
Agreement has also been made with Airbus to exercise existing purchase rights over 27 current generation A320s for delivery between 2015 and 2018, the airline confirmed this morning.
“This provides easyJet with the flexibility to continue to execute its proven strategy of disciplined growth and to take advantage of profitable market opportunities,” the carrier said.
The current generation A320 delivers a cost per seat improvement of between 7% and 8% compared to A319s.
“These aircraft are subject to a very substantial price discount from the list price and are expected to be funded through a combination of easyJet’s internal resources, cashflow, sale and leaseback transactions and debt,” the airline said.
The additional aircraft will bring the fleet size up to 304 aircraft by 2019.
“However, the fleet arrangements also give easyJet the ability to manage the fleet size to between 204 and 316 aircraft by 2019 depending on economic conditions and opportunities available,” the carrier said.
Chief executive Carolyn McCall said: “EasyJet’s proven strategy continues to deliver significant returns for shareholders which is why we are increasing our payout ratio for the ordinary dividend to 40%.
“We are bringing new aircraft into the fleet as we continue to see a significant number of new profitable opportunities in our core markets in the near term and in order to maintain our cost advantage.
“The continued strength and execution of our business model provides the platform to deliver sustainable growth and attractive cash returns for shareholders in the years to come.”