Ryanair 2010 Annual Report Download - page 113

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Ryanair has also been trying to prevent both the BAA in London and the DAA in Dublin from
engaging in wasteful capital expenditure. In the case of London (Stansted) Airport, the BAA was planning to
spend £4 billion on a second runway and terminal, which Ryanair believes should only cost approximately £1
billion. Following the final decision of the U.K. Competition Commission forcing BAA to sell London
(Stansted) airport, Ryanair believed that it was highly unlikely that BAA’s planned £4 billion plans would
proceed. The recently elected Liberal/Conservative government in the U.K. has also outlined that it will not
approve the building of any more runways in the Southeast of England. Consequently, in May 2010, the BAA
announced that it would not pursue its plans to develop a second runway at London (Stansted).
In the case of Dublin, the DAA has built a second terminal, costing over four times its initial estimate.
When the DAA first announced plans to build a second terminal (“Terminal 2”) at Dublin Airport, it estimated
that the proposed expansion would cost between 1170 million and 1200 million. Ryanair supported a
development of this scale; however, in September 2006, the DAA announced that the construction of Terminal 2
would cost approximately 1800 million. Subsequently, the cost of the new infrastructure rose in excess of 11.2
billion. Ryanair opposed expansion at what it believed to be an excessive cost. On August 29, 2007, however
the relevant planning authority approved the planning application from the DAA for the building of Terminal 2,
a second runway, and other facilities, all of which went ahead. On May 1, 2010, the airport fees per departing
passenger increased by 27% from 113.61 to 117.23, and could increase by up to 8.0% in November 2010 to
118.64 following the opening of Terminal 2 in November 2010 and by up to a further 12.0% in January 2011 to
120.88 in accordance with the CAR’s decision on December 4, 2009 in relation to airport charges between 2010
and 2014. Ryanair sought a judicial review of the planning approval; however, this appeal was unsuccessful.
The increase in charges, in combination with the introduction of the 110 Air Travel Tax mentioned above, could
lead to substantially reduced passenger volumes and a significant decline in yields on flights to and from Dublin
Airport. Ryanair has responded by moving to reduce capacity in both summer and winter periods. See “Item 3.
Risk FactorsRisks Related to the CompanyRyanair’s Continued Growth is Dependent on Access to
Suitable Airports; Charges for Airport Access are Subject to Increase” and “—The Company Is Subject to Legal
Proceedings Alleging State Aid at Certain Airports,” as well as “Item 4. Information on the Company—Airport
Operations—Airport Charges.”
Dividend Policy.
Since its incorporation as the holding company for Ryanair in 1996, Ryanair Holdings has not declared
or paid dividends on its Ordinary Shares. However, the directors of Company declared on June 1, 2010 that
Ryanair Holdings intends to pay a special dividend of 1500 million, to be paid in October 2010, subject to
shareholder approval at its annual general meeting on September 22, 2010. The Company also indicated in the
same announcement that it may pay a further dividend of up to 1500 million before the end of fiscal year 2013,
subject to, amongst other things, its continued profitability and the absence of further aircraft purchases or any
other significant capital expenditures. The Company may ultimately determine not to pay any such dividend, or
may fail to obtain shareholder approval. The Company may pay other dividends from time to time, or it may not
pay any dividends at all, as has been its practice to date. No assurances can be given that the Company will, or
will not, pay dividends. Any cash dividends or other distributions, if made, are expected to be made in euro,
although Ryanair Holdings’ Articles provide that dividends may be declared and paid in U.S. dollars. In the case
of ADRs, the Depositary will convert all cash dividends and other distributions payable to owners of ADRs into
U.S. dollars to the extent that, in its judgment, it can do so on a reasonable basis, and will distribute the resulting
U.S. dollar amounts (net of conversion expenses and any applicable fees) to the owners of ADRs. See “Item 12.
Description of Securities Other than Equity Securities” for information regarding fees of the Depositary.
Share Buy-back Program
Following shareholder approval at the 2006 annual general meeting of shareholders, a 1300 million
share buy-back program was formally announced on June 5, 2007. This buy-back program was not completed
before the 2007 annual general meeting. The Directors therefore sought a renewal of the above authority.
Permission was received at the annual general meeting of the shareholders held on September 20, 2007 to
repurchase a maximum of 75.6 million Ordinary Shares representing 5% of the Company’s then outstanding
share capital. The 1300 million share buy-back of approximately 59.5 million shares, representing
approximately 3.8% of the Company’s pre-existing share capital, was completed in November 2007. In
February 2008 the Company announced a second share buy-back program of up to 1200 million worth of
shares, which was ratified by shareholders at the annual general meeting of the shareholders held on September
18, 2008. 18.1 million shares were repurchased under this program at a cost of approximately 146.0 million and,