Ryanair shares fell more than 7 per cent amid a warning for investors to be "cautious and conservative" on the year ahead.
This morning the airline posted a 33 per cent jump in annual net profit, helped by higher ticket prices, but said profit growth would slow as higher UK interest rates prompt thrifty travellers to seek cheaper deals.
Europe's biggest low-cost carrier said it expected profit growth of only around 5 per cent in the current business year with average ticket prices falling as higher borrowing costs curb consumer spending in Britain, Ryanair's biggest market.
Once adjusted to exclude one-off items, profit after tax at the airline rose to €401.4 million ($540.4 million) in the 12 months to end March versus €301.5 million a year earlier.
Ryanair chief financial officer Howard Millar noted its planes were not as full as a year ago.
"Interest rate rises in the UK are starting to have an effect on the whole industry, how consumers are spending, they've less money available," he said.
The Bank of England has raised rates four times since August. It is expected to hold interest rates at 5.5 per cent this month, but most economists believe another increase is only a matter of time.
Ryanair said an expanding route network would mean a 22 per cent increase in the number of passengers it carries to over €52 million in its current business year but warned average ticket prices, known as yields, were set to fall 5 per cent.
"As a result we expect profit growth over the coming year to be more modest and to rise by approximately 5 per cent," the company said in a statement. "We believe that the company and our shareholders should remain cautious and conservative."