European no-frills carrier Ryanair has announced that it would reward its shareholders with a cash payout of around 1 billion pounds from 2013.

Ryanair has decided not to buy 200 aircraft from Boeing, in a move that will cut back its capital spending considerably in the approaching years.

Commenting on the issue, the budget airline Ryanair said, "We expect our current cash reserves of £2.2bn to grow substantially by March 2013 and we plan to distribute surplus cash to shareholders from that date."

Ryanair may lift its annual profit forecast following drastic cut backs in capital spending.

Its passenger traffic increased 13 per cent to settle at 65.3 million over 2009.

The low-cost carrier also announced that it had hedged 50 per cent of its fuel requirements for the year to March 2011.

Shares in Ryanair slipped 7 cents to €3.47.