Ryanair says rising fuel costs have led to lower than expected quarterly profits for the three months to the end of June.
Europe’s largest budget airline posted a first-quarterly net profit of €139m: one percent higher than the same period last year, but below the €151m forecast by analysts.
Ryanair said a “substantially higher” fuel bill had contributed to its flatter profits. Fuel rose by €140 million on the same Q1 period a year ago – to €427 million euros between April and the end of June.
In a statement, Michael O’Leary, Ryanair’s chief executive said “stubbornly high” oil prices would force airline competitors to keep increasing their fuel surcharges and fares, which would make Ryanair’s low fares “even more attractive”.
He said high oil prices would lead to more consolidation as well as more airlines leaving the industry.
O’Leary added: “This will generate growth opportunities for Ryanair because we operate the most fuel efficient aircraft, and have the lowest operating costs.”
Ryanair said it had bought 90% of its oil requirements for the current financial year (to next March) at about US$86 a barrel.
Currently, oil prices are trading at about US$118 a barrel.
Ryanair also posted a 22 percent increase in ancillary sales – anything it sells directly to passengers other than the ticket cost – in Q1 compared to last year.
The airline said this represents about one fifth of its total revenues.
In May, Ryanair began trialling an optional €10 fee for passengers to pre-reserve seating on seats with extra leg-room, on flights from Dublin to Malaga and Gatwick.
Ryanair was singled out in a recent study by comparison website, travelsupermarket.com for charging more for in-flight food and drink items than other British and Irish airlines.