Ryanair profit hit by soaring fuel costs

Ryanair, Europe's largest low-cost airline, posted quarterly profits below market expectations due to higher fuel and operating costs.

The Irish airline, which operates more than 1,500 flights a day, said it expects average income yields to rise by 12 to 15 per cent in its second quarter ending in September, but warned traffic would fall four per cent in the next winter season as high fuel costs will force the airline to ground flights.

Revenues in the three months to June grew 29 per cent to 1.16 billion euros (£1.2bn), meeting market expectations. But net profit was €139m, well short of the €151m forecast by a panel of analysts.

Ryanair maintained its profit forecast for the year of €400m.