Ryanair says fuel costs and eurozone crisis will hit profits

Ryanair, which carried 75.8 million passengers last year, raised fares 16% to help offset a fuel bill that was 30% higher

“No frills” airline Ryanair has warned that higher fuel costs and turmoil in the eurozone could knock up to 20% off annual profits this year.

The warning took the shine off record annual profits of €503m (£406m) in the year to 31 March from the Dublin-based carrier. The company said the outlook for the new financial year was tough with lower profits of between €400m and €440m pencilled in.

Ryanair’s share price, which peaked at €4.49 at the start of April, has been knocked by the escalating crisis in the eurozone. Shares fell nearly 6% in early morning trading.

The Ryanair chief executive, Michael O’Leary, anticipated the airline’s fuel bill would rise by €320m. He said: “Recession, austerity, currency concerns and lower fares at new and growing bases … will make it difficult to repeat this year’s record results. Any increase in fares will only partially offset higher fuel costs.”

O’Leary also confirmed a payout of €483m for shareholders, which is only the second time the airline has paid a dividend since floating in 1997.

Ryanair, which carried 75.8 million passengers last year, raised fares 16% to help offset a fuel bill that was 30% higher. The company said it would not be able to increase ticket prices by as much this year, with a rise of around 3% expected. Budget rival EasyJet said an increase in business travellers would help it overcome high fares, with higher sales expected in its second half.

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