May 21 - Europe's biggest budget airline Ryanair, warned surging fuel costs and a worsening economic outlook meant profit would slip by up to 20 percent in the coming year, which would represent the first fall in four years. Hayley Platt reports.
Europe's biggest budget airline warned of tough times ahead despite posting record annual profits. Dublin-based Ryanair made 503 million euros in the year to March - 25 percent more than the previous year and well ahead of the 491 million euros forecast. But it said surging fuel costs and a worsening economic outlook mean profits in 2013 are set to fall up to 20 percent. It will be the company's first drop in profits since 2009. The airlines chief executive Michael O'Leary blamed the recession, austerity and currency concerns. But was reasonably optimistic about the future. SOUNDBITE: Michael O'Leary, chief executive, Ryanair, saying (English): "I think the underlying state of the economy is not quite as bad as the state of the euro. People continue to fly, they'll keep going on holidays with regardless of what happens to the currency, it's just more and more of them are switching to flying with Ryanair for intra European travel and away from the high fare flag carriers like BA, Air France and Lufthansa that are raising fuel surcharges at a time when Ryanair guarantees no fuel surcharges." Ryanair's fuel bills already rose 360 million euros over the last year and it expects another rise of 320 million euros in the coming year. But it said any increase in fares will only partially offset the higher costs. Ryanair also announced it would pay out 483m euros to shareholders in its second-ever dividend payout since floating in 1997. Hayley Platt, Reuters. Ryanair said traffic grew by 5 percent while fares rose on average by 16 percent. This helped overcome a 30 percent rise in fuel costs but O'Leary said any increases in fares will only partially offset higher fuel costs.