Ryanair has today announced a 26% increase in annual profits to €401m.
Revenues increased 21% to €3.63bn as traffic grew 8% and average fares rose 12%.
Unit costs rose by 11% due to higher oil prices and a 10% increase in sector length. Excluding fuel, (up 37% to €1.23bn) unit costs rose by just 3%.
Ryanair warned that higher air fares in the year to March 2012 will only help cover higher fuel costs and it now expects full-year profits to be flat year on year.
It said fuel costs increased by 37% to €1.2bn in the last financial year as average oil prices increased from $62 a barrel to $73.
But chief executive Michael O’Leary said rising crude oil prices did present opportunities for the airline.
He said: “Higher oil prices will force competitors to continue to increase fares and fuel surcharges which makes Ryanair’s lower fares even more attractive.
“In many cases competitors’ fuel surcharges are higher than Ryanair’s lead-in fares. Higher oil prices will lead to further consolidations, increased competitor losses, and more airlines going broke.”
Earlier this month, low-cost rival easyJet reported a near doubling in half-year losses as it battled higher fuel prices.
Ryanair cancelled 14,000 flights in the last financial year due to volcanic ash disruptions, airport snow closures and repeated air traffic control strikes.
Like its low-cost rivals, Ryanair sees ancillary revenues as a key part of business as it allows airlines to keep ticket prices lower.
Ancillaries grew 21% to €802m somewhat faster than traffic growth, and amounted to 22% of total revenues.
It added 40 new aircraft to its now 272-strong fleet and moved into eight new bases, including Seville, Tenerife and Lanzarote among others.
The airline welcomed the Government’s recent decision to scrap the tourist tax as a "step in the right direction", but unless accompanied by competitive airport charges, traffic growth will not return to Irish airports, according to Ryanair.
Ryanair is 90% hedged for FY12 at $820 per tonne (approx. $82 per barrel), a 12% price increase on last year, but significantly below current prices.
Although the airline expects to grow traffic in FY12 by 4% to over 75m passengers, this will be characterized by strong growth of up to 10% in H1, but these steeper winter capacity cuts will cause monthly traffic in H2 to fall by approx. -4%.
Despite these winter capacity cuts, Ryanair still expects its full-year fuel bill to increase by approx. €350m.
Ryanair expects to grow traffic by 10% in H1, and then cut traffic by 4% in H2. It anticipate traffic in FY 12 to grow 4% to 75m passengers.