Ryanair has reported record results for the 12 months to the end of March with pre-tax profits up almost 30% at €295.9m, beating market forecasts.

The no frills airline, which celebrated 20 years in operation this month and is planning to overtake British Airways as Europe's biggest carrier later this year, increased its turnover by 24% to just under €1.4 billion.

Basic earnings per share for the year rose to 35.38 cent, from 29.91 cent the previous year.

During the year Ryanair increased the number of passengers it carried by 19% to 27.6 million people. Contrary to initial expectations, average yields for the 12 months rose by 2%, despite a 16% increase in capacity.

Ryanair says its operating costs rose by 25% and the airline blamed this on higher fuel prices.

The company says that the majority of its growth during the year was attributable to fuel surcharges imposed by other short haul airlines which widened gap in ticket prices between Ryanair and its competitors. Ryanair has refused to impose fuel surcharges.

Acknowledging that the market remains volatile, Ryanair said that high oil prices will continue to impact its cost base over the coming 12 months. The airline is unhedged for the remainder of this summer and is benefiting from the recent oil price declines.

But in order to remove some cost uncertainty during the volatile winter period, the airline has hedged 75% of next winter's fuel requirements at rates equivalent to €47 per barrel.

'We will continue to exploit our hedging policy where we believe it can remove uncertainty from our business at acceptable cost levels,' Ryanair said.

The airline said that its new routes and bases continue to perform well. It has seen strong advance books at its new Luton and Liverpool bases in the UK. Traffic at Ryanair's new Shannon base is also booking strongly, but yields have been slightly lower than expected.

Ryanair said the single most important initiative of the past 12 months was the purchase of 140 Boeing 737-800s - comprising 70 firm and 70 options. These are due for delivery from 2008-2012 at a substantial discount to its previous aircraft order.

Ryanair CEO Michael O'Leary says the airline has instructed its lawyers to prepare a legal action to oppose a second terminal at Dublin Airport built by the Dublin Airport Authority on competition and public procurement grounds.

The airline wants the second terminal to be built and operated by a competitor to the Dublin Airport Authority.

Ryanair said its outlook for the coming 12 months is more positive than it was this time last year year. 'We continue to budget for higher oil prices, but anticipate that these higher costs will be partially offset by a slightly more benign yield environment,' it said.

It said that advance bookings for the summer months are strong, and it is raising its traffic growth forecast for the coming year from 34 million to 35 million. 

Ryanair shares closed up 21 cent at €6.46 in Dublin.