Europe's largest no frills airline Ryanair has warned that its fuel costs are likely to be higher this year than expected if oil prices stay at current levels.
But ceo Michael O'Leary said that the carrier's present traffic growth was “strong” and he expected yields for the second quarter to be higher than in the same period last year.
Mr O'Leary said for the first quarter yields would be “flat” compared with the same period in 2004.
He predicted that if oil prices cost around $60 a barrel throughout the summer, rival carriers would be forced to increase their surcharges or raise fares.
“The bloodbath in Europe is continuing and will get worse at $60 a barrel,” he said. At such prices, he predicted there would be no new low cost entrants and some present carriers would fold.
Ryanair recently announced record net profits of 266.7m for the 12 months to March 2005.
* The airline also announced four new routes and said it would increase frequency on five others.
The new routes, all from London Stansted, will fly to Lodz and Poznan in Poland, Kaunas in Lithuania and to Grenoble in France from September.
Ryanair would then be serving seven Polish cities, putting immense pressure on local low cost carriers like SkyEurope and WizzAir.
Services to Riga, Tampere, Derry, Seville and Granada will be increased to two a day.
The airline is also likely to cut five of its worst performing routes later this year but no details have yet been announced.