Ryanair gives flat forecast despite profit

 
City A.M. Reporter
EUROPE’S largest low-cost airline Ryanair said yesterday high fuel costs and a lack of growth in capacity would mean flat earnings this year after a 26 per cent surge in 2010, sending its shares down 6.2 per cent.

The Irish airline, which operates more than 1,500 flights a day, said it expected traffic growth to slow to four per cent in 2012 from eight per cent last year and that increases in average fares would be eaten up by higher fuel costs.

Ryanair’s 26 per cent surge in net profit for 2011 to €401m (£349.8m) was at the top end of guidance and above the €382m forecast by analysts.

A new volcanic eruption in Iceland prompted worries the ash cloud could affect airlines across Europe, but Ryanair said it did not expect a repeat of last year’s disruption which cost the airline €30m (£26.2m) and investors instead homed in on its subdued outlook.

Chief executive Michael O’Leary said Ryanair planned to pay out dividends towards the end of 2013.