RYANAIR HAS reported net profits of €139 million for its first quarter, up by 1 per cent compared to the same period a year earlier.

Revenues at the airline rose by 29 per cent to €1.55 billion from €896 million. Traffic increased 18 per cent during the quarter from 18 million to 21.3 million.

Fares rose by 11 per cent in the quarter while costs jumped by 14 per cent due to a 49 per cent rise in fuel costs.

Ryanair said its ancillary revenues rose by 22 per cent to €248 million and accounted for 21 per cent of total revenues over the quarter.

The airline said it hoped an optional €10 charge on some routes for extra leg room, which was recently introduced, will further boost ancillary income.

“It’s a solid performance, even if the costs may have surprised some,” said NCB chief economist Brian Devine.

“But there is no real catalyst for the share price. The market’s profit expectations for the year are well ahead of Ryanair’s and there is nothing here to change that,” he said.

The airline said traffic growth was “flattered” in the first quarter due to airspace closures in April and May 2010 following the Icelandic volcanic eruptions which led to the cancellation of 9,400 flights and the loss of almost 1.5 million passengers.

Ryanair said fuel prices “remain stubbornly high” but said it was 90 per cent hedged on fuel at $860 per tonne.

The airline, which operates more than 1,500 flights a day, said it expects average income yields to rise by 12 to 15 per cent in its second quarter, but warned traffic would fall 4 per cent in the next winter season as high fuel costs will force the airline to ground flights.

It said average fares for the full year would rise by up to 12 per cent, with average operating costs per passenger up by 13 per cent.

Ryanair maintained its profit forecast for the year of €400 million. – (Additional reporting Reuters)