Ryanair has raised its profit forecast as it said that higher ticket prices were more than making up for expensive fuel and reduced capacity, underlining the resilience of its low-cost sector.
Ryanair increased its full year profit forecast by 9% to €480m after posting revenue growth of 13% in the three months to December 31.
"The EU recession, higher oil prices, the unfolding failure of the package tour operator model, significant competitor fare increases and capacity cuts, has created enormous growth opportunities for Ryanair," chief executive Michael O'Leary said.
The airline reported a net profit of €15m, well ahead of a €16m loss forecast in a poll of analysts compiled by the company, after it grounded 80 of its 270 planes over the winter due to high fuel costs.
Revenue came to €844m in the quarter, again ahead of an average analyst forecast of €819m. Average fares rose 17% in the quarter from a year earlier, making up for a 2% fall in passenger numbers. The airline said that unit costs rose 11% due to a 7% increase in sector lengths and an 18% increase in fuel costs.
A forecast €350m increase in the fuel bill next year "poses a significant cost challenge," Michael O'Leary said.
Ryanair follows UK low-cost rival EasyJet in posting strong revenue growth as higher-priced rivals are battered by fuel costs and a struggling global economy. German group Lufthansa and Air France-KLM have cut profit forecasts after being battered by fuel costs and slashed plans to expand in 2012.
Ryanair, which expects passenger numbers to grow to 80 million passengers this year from 76 million in 2010, carried more international scheduled passengers than any other airline in 2010, according to the International Air Transport Association.