Ryanair said today its earnings guidance for the current year remained unchanged but warned fuel costs would be higher than expected if oil prices stayed at record highs.
"If it stays at $60 (per barrel) through the remainder of the summer and the winter, our fuel bill will be higher than originally predicted," chief executive Michael O'Leary said.
He said if that happened, his competitors would be forced to increase their fuel surcharges and raise their fares.
"The bloodbath in Europe is continuing and will get worse at 60 dollars a barrel," he predicted, referring to feisty competition among carriers. He reiterated that every one dollar rise in fuel costs above $47 a barrel would wipe €5 million off annual pretax profits.
Ryanair is unhedged on fuel until September when it is hedged at $47 per barrel covering up to 90 per cent of its fuel costs.
Mr O'Leary said yields for the first quarter, which ends this month, would be flat compared with the same period a year ago while they would rise slightly in the second quarter year on year, reiterating earlier guidance.