The Dublin-based operator reported an 85% fall in first quarter pre-tax profits to £16.6m and said it expected to full-year result of between break-even and a loss of £47.3m.
Chief executive Michael O’Leary said the company’s fuel bill rose by 93% to £289.6m in the first quarter, –representing almost 50% of its operating costs – compared with 36% last year.
Despite the pressure from oil prices, Mr O’Leary said the airline remained committed to its guarantee of no fuel surcharges.
He said: “We will continue to absorb higher oil costs, even if it means short-term losses, while we continue to deliver Europe’s guaranteed lowest fares to our 58m passengers.”
Oil prices hit 147 US dollars a barrel this month, but Ryanair recently took advantage of a fall in the price to fix 90% of its fuel requirement at 129 US dollars a barrel for September and 80% of the October to December period at 124 dollars. However, it is unhedged for the fourth quarter to the end of March.
Ryanair said its forecast of a possible loss for the full year was based on fourth-quarter oil prices of 130 US dollars and a 5% decline in average fares.
It said it would look to maintain “aggressive pricing” in order to fill its planes.
Mr O’Leary said: “We now believe that our average fares for the year may fall by as much as 5% if European airfares plunge this winter.
“Ryanair will lead this downward pricing at a time when most of our competitors are hoping to raise fares and fuel surcharges.”
The firm plans to cut weekly flights from more than 1,850 to below 1,600 this winter.