Ryanair says soaring oil prices may cost it an extra €40 million this year at current levels but continues to rule out introducing a fuel surcharge.
Chief executive Mr Michael O'Leary said today he was confident the price of fuel would fall in the next year and reiterated there were no plans to resume hedging until oil neared $30 a barrel.
"Down at the low 30s we would certainly hedge. I think it will fall back," Mr O'Leary told reporters.
Oil prices struck a fresh record high above $47.50 and European airlines have responded by introducing fuel surcharges to help compensate for higher fuel costs.
Fuel takes up 14 per cent of Ryanair's revenues, which could rise to 25 per cent if fuel prices doubled, Mr O'Leary said.
Ryanair is currently hedged until the end of October at $26 a barrel. Fuel hedging allows airlines to fix fuel costs months in advance.
He reiterated Ryanair would still be profitable even if prices doubled to $80 while its competitors would collapse.
The "bloodbath" he forecast to hit Europe's airlines this winter had already started. "It is here and now. It is going to get worse in the winter," Mr O'Leary said.
Ryanair said it was in talks with 50 European airports about setting up new bases or routes and was close to concluding deals with four bases, although none were likely to be announced before Christmas.
The airline beat market forecasts with higher first-quarter earnings earlier this month but faces exposure to higher oil prices and lower ticket prices.
Ryanair shares were trading 0.5 per cent higher at €4.28 in Dublin at 12:55 p.m.