Ryanair has defied the aviation slump by posting a 280 percent increase in pre-tax profits to €350 million for the financial year ending 31 March. The budget carrier also said it will pay its first ever dividend, a one-off payment of €500 million.

Revenue rose 2 percent to €2.99 billion as traffic grew by 14 percent to 67 million passengers for the year.

The carrier benefited from lower fuel costs during the year. It expects these to rise in the current year, but is confident that higher fares will see its profits climb to between €350m and €375m.

O’Leary also attacked the decision to close European airspace in April due to the volcanic ash from Iceland. He estimated that forced cancellations cost the airline about €50m.

The one-off dividend of €500 million, or €0.34 per share, is its first such payment since it was listed in 1997. It will be paid in October subject to shareholder approval at its annual general meeting in September.

Chief Executive Michael O’Leary will find himself €20m wealthier from the pay-out as he owns a 4 percent stake in the airline.

He said that the airline expects to generate €1 billion in surplus cash by the end of 2013, said that a further €500 million will be available for return to shareholders, either through share buy-backs or another one-off dividend.

Ryanair last year posted its first loss in 20 years after writing down the value of its stake in its former takeover target Aer Lingus.