Budget airline Ryanair is blaming a multi-million slide in profits on hugely increasing fuel costs.
The Irish airline which operates 1,500 flights a day made €40million (£31m) less in the first quarter of 2012 than the same period a year ago, despite carrying more passengers.
Michael O’Leary, Ryanair’s Chief Executive said today: “As we previously guided, significantly higher fuel costs caused Q1 profits to fall by €40m (from €139m last year’s) to €99m (£77m). Our 6% traffic growth combined with a 4% rise in [average] fares led to an 11% increase in revenues.”
He said a jump in fuel costs of a third (27%) bumped up operating costs by 10%, with fuel counting for 47% of total operating costs.
Airline industry lobbyists the International Air Transport Association (IATA) recently warned that rising fuels costs could affect airline profitability, in June predicting profits could halve in 2012 because of oil prices and a drop in demand for flights.