Ryanair expects passenger numbers to grow by 20% next year

The rise in profits came despite a 74% increase in fuel costs to 462m euros as oil prices continued to climb.

Ryanair said it had attracted custom by not levying a fuel surcharge, unlike other airlines. Passenger numbers for the year grew by 26% to 35 million.

But the airline said it was cautious about its prospects given higher oil prices and fierce price competition.

Total revenues for the year to 31 March were 28% higher at 1.69bn euros.

The carrier said that while it was confident that passenger numbers would grow by about 20% to 42 million in the current business year, profits were set to rise by a "more modest" 5%-10%, assuming the price of oil stayed at $70 a barrel.

Profit growth is expected to be kept in check by the cost of launching new routes and bases, Ryanair said, and by rival carriers cutting fares.

Internet check-in

Ryanair chief executive Michael O'Leary said the key to the airline's profit growth was its refusal to levy fuel surcharges on passengers, unlike other carriers.

"This is driving other passengers to Ryanair," Mr O'Leary said.

The carrier said had it sought to protect itself from future rises in oil prices by hedging 90% of its fuel needs from June to October, at an average price of $70 a barrel.

It also said cost-cutting measures such as internet-based check-in and charging for bags were both doing better than expected.

Ryanair said it was now seeing flights with more than 50% of passengers using its internet check-in and priority boarding facility, while charging for check-in bags had led to passengers travelling with less luggage.

The airline is also seeking to improve revenues from non-ticket sources, and said it was "close to finalising new initiatives to offer our customers mobile phone services on board in 2007 and website gambling".

BAA ownership 'immaterial'

Ryanair said it would continue to campaign for the break-up of the BAA airport "monopoly" in the UK.

Its comments came as confirmation was expected of BAA's agreed takeover by Spanish group Ferrovial.

However, Ryanair chief executive Michael O'Leary said a deal made no difference, since it would still mean that one company owned most of London's airports.