Ryanair swings back into profit

Ryanair has reported pre-tax profits of 341m euros (£289m) for the year to March, bouncing back from its first annual loss this time last year.

The Irish budget airline also said it planned to pay a one-off dividend to shareholders totalling 500m euros - the first dividend it has paid.

Passenger numbers were up 14% on last year, while revenue rose 2%.

But the airline said disruption caused by volcanic ash, not covered in the results, would cost about 50m euros.

Reporting the results, Ryanair said the airline had performed well during difficult times for the airline industry as a whole.

"We can be proud of delivering a 200% increase in profits and traffic growth during a global recession when many of our competitors have announced losses or cutbacks, while more have gone bankrupt," it said in a statement.

The airline benefited significantly from lower oil prices, with fuel costs down 29% from the previous year.

Profits would have been higher but for the falling value of the airline's stake in rival Aer Lingus, which meant it wrote off 13.5m euros.

Ryanair said its outlook for the coming year was positive, forecasting an 11% rise in passenger numbers and a 10% to 15% rise in profits.

But it also said it planned to raise baggage fees from the present rate of £15 a bag to £20 a bag for July and August.

Speaking to the BBC, Ryanair's chief executive Michael O'Leary said the move was not about raising further revenues.

He said he hoped to encourage passengers to carry fewer bags in the summer months, bringing baggage volumes in line with the rest of the year.

About 75% of Ryanair passengers fly with hand luggage only.

The results do not cover the recent disruption caused by volcanic ash, which grounded flights in Europe for several days in April.

Ryanair said it expected the total cost of the disruption to be approximately 50m euros, with a total of 9,400 flights cancelled and the loss of 1.5 million passengers.

But it warned that "unfair and disproportionate" EU regulations on passenger compensation meant that the airline could be liable for further payouts.

Mr O'Leary said the airline would be suing a number of European governments and demanded a change to the regulations on compensating passengers in the event of disruption.

"These regulations weren't designed for the catastrophic closure of European airspace for 18 days, they were designed for a fog event over one night at one airport," he said.

"These regulations have got to be changed."