Ryanair is expecting higher average fares and a 20 per cent rise in passengers to offset costs resulting from soaring oil prices, says chief financial officer Howard Millar.
Mr Millar said the airline, whose protection from soaring oil prices runs out this week, faced another challenging year with fuel set to account for 38 per cent of total costs.
He also said the company would continue expanding aggressively, with up to three new bases planned in Europe this year, and that 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," Mr Millar said.
Mr Millar said Ryanair would not resume hedging fuel costs until the oil price fell well below $60 per barrel. He said the airline expected a similar pattern to last year when it entered the busy summer season unhedged and relied on higher average fares to offset the damage.
He repeated Ryanair's guidance for a 10 per cent rise in net profit to €295 million for the current year to March 31st, 2006, downplaying some analysts' expectations it could slightly overshoot that target.
Yields, or average fares, were still expected to decline 5-10 per cent due to the timing of Easter.
Ryanair expects to carry 42 million passengers in the year ahead, up from 35 million this year.
The carrier is talking to two potential partners on in-flight gambling with an announcement expected in the first quarter of 2006/07, he said. Mr Millar also expected in-flight mobile phone services to be available in 15 to 18 months.
Mr Millar also said the airline had received some very attractive offers to move its headquarters to eastern Europe but that there were no plans to leave Dublin.
Ryanair shares were trading 0.3 per cent firmer at €7.72 this morning after hitting €7.82 earlier today.