Low cost airline Ryanair today said it had swung into the red with third-quarter losses of €101.5m (£90.3m), but raised full-year profit expectations thanks to recent plunging fuel costs.
The carrier now expects to report an annual profit of between €50m (£44m) and €80m (£71m), having previously forecast that it would only break even.
Ryanair was battered by last year's oil price bubble, which saw its fuel costs soar by 71 per cent in the final three months of 2008.
However, oil prices have since collapsed amid the global economic downturn.
Ryanair also expects to return to "substantial profitability" in the next financial year in light of lower fuel costs.
Its third quarter losses compare to post-tax profits of €35m (£31m) a year ago.
It said the performance was "disappointing", but added passenger traffic was rising as cash-strapped consumers switched to lower cost travel.
Ryanair's passenger numbers rose 13 per cent to 14 million in the three months to 31 December.
The Dublin-based airline, which is led by flamboyant chief executive Michael O'Leary, cut air fares by 9 per cent on average to lure in cost-conscious travellers.
The fare cuts came despite Ryanair forking out an extra €328m (£291m) on fuel between October and December.
The group said its decision not to "hedge" - or effectively fix -fuel costs in the fourth quarter of its financial year had paid off as prices continue to fall sharply.
"Ryanair will enjoy significantly lower oil costs thanks to our recent hedging programme, when most of our competitors are already hedged at much higher prices. We intend to use this cost advantage to again lower fares," said Mr O'Leary.
The group expects fares to fall by more than 10 per cent in its next financial year, although the recession could force prices down even lower, according to the group.
"The longer and deeper this recession, the better it will be for the lowest cost producers in every sector," added Mr O'Leary.
Ryanair is also benefiting from strong "ancillary" sales, up 19 per cent in the third quarter and now accounting for more than a fifth of group revenues.
It is trialling an on-board mobile phone service from the end of this month, which it hopes will eventually add further to revenues.
Ryanair also confirmed that it was unlikely to make another offer for rival Dublin carrier Aer Lingus after it last month withdrew its latest bid for the airline, which was rejected by the Irish government.Reuse content