EasyJet to hand out first dividend as profits quadruple

The budget airline said its underlying pre-tax profit rose to 188.3m in the year to the end of September, up from 43.7m a year earlier, while revenues grew 11.5 per cent to 2.97bn.

Carolyn McCall, EasyJet's chief executive, said the airline would pay its first ever dividend in 2012, in respect of the year ending September 2011.

"The time is right to set in place a formula to trigger a dividend payment in years when the company is profitable whilst at the same time ensuring that it retains a conservative capital structure," said Ms McCall.

"We therefore intend to commence the payment of an annual dividend based on a dividend cover of five times."

EasyJet's founder and largest shareholder Stelios Haji-Ioannou, who had for some time urged the business to return cash to investors, said in a statement the move was "a welcome change" but added that he wanted the payout ratio "increased to 50 per cent of earnings per share" over time.

The carrier, which was hit by 97.9m of costs related to various disruptions during the year, said it hoped to add 24 planes to its fleet to take it up to 220 aircraft by September 2013, representing an average annual growth rate of 7 per cent per annum in seats flown.

"From 2013-2015 we have flexibility in our fleet plan in that our growth can be anywhere between 4 and 8 per cent," said Ms McCall. Fuel costs fell by 122.7m during the year.