Ryanair Warning Despite Record High Profits

Europe's biggest budget airline has reported a 25% rise in profits but warned that the outlook for the coming year is not as rosy.

Ryanair profits rose to 503m euros (£406m) in the year to March, well ahead of the forecast of 491m euros (£396m).

Passenger traffic grew 5% on the year to 76 million despite the the airline having to ground 80 of its planes in the winter.

Despite the record results, the carrier expects profits to fall by a fifth in the coming year on the back of higher fuel costs and a worsening economic outlook.

This would represent the company's first drop in profit since 2009.

"Really the problem for us is that while the summer looks good with plenty of bookings, plenty of people switching to Ryanair to go on their holidays, next winter is much more difficult," chief executive Michael O'Leary told Sky News.

"We have no visibility, we have no bookings in the system yet and I think we're right to be cautious at this point in time.

"Clearly there's a lot of financial uncertainty, clearly there's a lot of worry about currency, higher oil prices, austerity. But people will still keep flying."

Ryanair's fuel bill already rose by 360m euros (£291m) over the last year. It expects a further 320m euro (£258m) in the coming 12 months, which the airline will partially offset through higher fares.

However, the carrier has seen some benefits from the higher oil price as competitors have either been forced to raise fares and fuel surcharges. Some, like Spanair and Malev, have even been forced to close down.

Ryanair announced it would pay out 483m euros (£390m) to shareholders in its second-ever dividend payout since floating in 1997.