Easyjet yesterday said it was adding a further 27 planes to its fleet as it signalled confidence in its growth prospects by unveiling plans to pay more of its profits out to shareholders via dividends.
Chief executive Carolyn McCall said the budget carrier’s “proven strategy continues to deliver significant returns for shareholders”.
The group’s low-cost model has helped it and larger rival Ryanair weather an increasingly competitive European short-haul market, while more traditional carriers have struggled.
In April of last year, EasyJet’s share price reached an all-time high of 1,853p, but has since fallen by a quarter partly in response to uncertainty over whether it can maintain its stellar growth.
The Luton-based carrier said yesterday that its strong financial performance meant it would be able to increase the payout ratio for its dividend from one-third of profit after tax to 40 per cent of profit. More details are expected with the company’s annual results in November.
It is to step up its expansion by taking up an option with European plane-maker Airbus for the addition of another 27 aircraft.
The current generation A320s will give it 304 aircraft by 2019 but the airline said it has the flexibility to manage the fleet size to between 204 and 316 planes depending on economic conditions and opportunities available.
Major shareholder and EasyJet founder Stelios Haji-Ioannou has been a vocal opponent of the group’s expansion strategy.
But McCall said: “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.”