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Ryanair fears 60 million Euros losses

The airline admitted that at best it would break even, based on fourth-quater oil prices of around $130 per barrel and its average fares falling by 5% for the full year.

As yet, however, Ryanair has not fully hedged the price it has paid for oil for the full year, but Michael O’Leary, chief executive of Ryanair, said he believes barrel prices of $130 are unsustainable and will eventually fall. Fuel prices now account for almost 50% of its operating costs compared with 36% last year.

Ryanair also revealed its first quarter profits slumped 85% to €21 million, despite a 19% growth in traffic to 15 million passengers. But it added that along with high fuel prices, the absence of Easter from the period impacted on its results by comparison with last year.

Total revenue increased to €777 million compared with €693m this time last year.

O’Leary said: “The capacity reductions which will ensue from this winter’s wave of airline bankruptcies and consolidations will create more opportunities for Ryanair to grow.

"When oil prices fall significantly, as we believe they will over the medium term, then our earnings should rebound strongly.

"We have one of the strongest balance sheets in the industry and the business continues to be strongly cash-generative with €2.2 billion in cash.

"With the lowest fares and lowest cost base in the industry, Ryanair is the best positioned airline in Europe to take advantage of the opportunities  these difficult trading conditions will create.”