Ryanair 2009 Annual Report Download - page 105

105
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 Stansted Airport, the BAA is planning to spend U.K. £4
billion on a second runway and terminal, which Ryanair believes should only cost approximately U.K. £1
billion. Following the final decision of the U.K. Competition Commission forcing BAA to sell London
(Stansted) airport, Ryanair believes that it is highly unlikely that BAA’s planned £4 billion plans will proceed;
Ryanair will work with the new owners to develop appropriate low-cost facilities. Similarly, in the case of
Dublin, the DAA is proceeding with plans to build a second terminal, which will cost 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 €170 million and €200 million. Ryanair supported a
development of this scale; however, in September 2006, the DAA announced that the construction of Terminal 2
would cost approximately €800 million. Subsequently, the projected cost of the new terminal has risen to in
excess of €1.0 billion. Ryanair opposes expansion at what it believes to be an excessive cost. On August 29,
2007 the relevant planning authority approved a planning application from the DAA for the building of
Terminal 2, a second runway, and other facilities. The new construction is subject to a capacity restriction of 32
million passengers per year, and the runway is subject to limits in its hours of operation. The approval will mean
that charges at Dublin Airport will increase significantly, possibly doubling from their current level. Ryanair
sought a judicial review of the planning approval; however, this appeal was unsuccessful. Ryanair has
responded by moving to reduce capacity in both summer and winter periods. The increase in charges, in
combination with the introduction of the €10 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. 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 organization as the holding company for Ryanair in 1996, Ryanair Holdings has not declared
or paid dividends on its Ordinary Shares. For the foreseeable future, Ryanair Holdings anticipates that it will
retain any earnings in order to fund the business operations of the Company, including the acquisition of
additional aircraft needed for Ryanair’s planned entry into new markets and the expansion of its existing service,
as well as for routine replacements of its current fleet. Ryanair Holdings does not, therefore, anticipate paying
any cash or share dividends on its Ordinary Shares in the foreseeable future. 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 Bank of New York, as 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) to the owners of ADRs.
Share Buy-back Program
Following shareholder approval at the 2006 annual general meeting of shareholders, a €300 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 €300 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 €200 million worth of
shares, which was ratified by shareholders at the annual general meeting of the shareholders held on September
18, 2008. To date 18.1 million shares have been repurchased under this program at a total cost of approximately
€46.0 million. This is equivalent to approximately 1.2% of the Company’s issued share capital after taking into
account such buy-backs. All Ordinary Shares repurchased have been cancelled. See “Item 10. Description of
Capital Stock—Trading Markets and Share Prices” below for further information regarding share buy-backs.