18th Sep 2014 07:19
LONDON (Alliance News) - Low-cost airline easyJet PLC Thursday said it has decided to increase its ordinary dividend payout ratio to 40% from the current financial year, and it has also reached agreement with Airbus to exercise purchase rights over 27 current generation A320 aircraft.
The airline said that, in light of the continued strong financial performance of the company and confidence in the future, it has decided to increase the payout ratio for the ordinary dividend from one third of profit after tax to 40% of profit after tax from the financial year ending September 30.
EasyJet also said it has reached agreement with Airbus to exercise existing purchase rights over 27 current generation A320 aircraft for delivery between 2015 and 2018.
"The additional aircraft will augment easyJet's highly cash generative model and the board will continue to keep the balance sheet under review and intends to make further returns of capital to shareholders in the coming years," it said.
The new aircraft will deliver a cost per seat improvement of between 7% and 8% compared with a current generation A319 aircraft, it said, adding that it will pay a "very substantial price discount from the list price". The list price for these aircraft was USD76.3 million per aircraft as of January 2012, according to easyJet. Airlines traditionally get discounts from the list price.
Easyjet expects to fund the aircraft through a combination of internal resources, cashflow, sale and leaseback transactions and debt.
Its fleet will consist of 226 aircraft at the end of this financial year on September 30, but it now expects the fleet to rise to 304 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," it added.
easyJet is hosting a capital markets day in London Thursday afternoon.
Its shares were up 1.5% at 1.358.00 pence early Thursday, the second-best performing stock on the FTSE 100.
By Steve McGrath; [email protected]; @stevemcgrath1
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