Ryanair expects a higher fuel bill this year

Low-cost airline Ryanair has shared that it expects a higher fuel bill this year but higher average fares and a 20 percent rise in passengers would provide some relief from soaring oil prices.

Ryanair’s chief financial officer Howard Millar told Reuters that the company would continue expanding aggressively, with up to three new bases planned in Europe this year and a deal was close to introducing in-flight gambling.

“Our view will be that we will pretty much stay where we are. Fares will rise a bit, fuel prices will be up a bit and we should sustain some kind of reasonable margin,” Millar reportedly said. “We have suffered this year. Next year fuel will account for something like 38 percent of our cost base.”

Millar said Ryanair would not resume hedging fuel costs until the oil price fell well below $60 per barrel. He reiterated Ryanair’s guidance for a 10 percent rise in net profit to 295 million euros (205 million pounds) for the current year to March 31, 2006, downplaying some analysts' expectations it could slightly overshoot that target.

As per the information available, yields, or average fares, were still expected to decline 5-10 percent due to the timing of Easter.  Ryanair expects to carry 42 million passengers in the year ahead, up from 35 million this year, as it continues to expand aggressively and aims to undercut the opposition with low fares.