Ryanair, the largest international airline in the world and Europe's largest low fare airline yesterday announced a first quarter net profit of E.136.5m ($195m), a E.115.5m ($165m) increase, or 550% over last year's comparative figure.

However, the company said that total revenues were flat due to an 11% rise in traffic being offset by a 13% decline in average fares.

Commenting on the results, Ryanair's Ceo, Michael O'Leary, said: ‘These quarterly results are distorted by a 42% reduction in fuel costs. Thanks to a 13% reduction in average fares we grew traffic by 11%, which was a robust performance in a deep recession, when many of our competitors were cutting flights, losing traffic and reporting increased losses. Out net profit margin rose to an industry leading 18% and our balance sheet was strengthened as cash balances rose to E.2.5bn ($3.5bn) at the quarter end. Ancillary revenues also outpaced scheduled traffic growth and rose by 13% to E.165.3m ($236.2m).

‘Fuel costs fell by 42% to E.214m ($306m) as we reaped the benefit of not engaging in fuel hedging last year when prices were high. Unit costs (excluding fuel) fell by 5% as we continued to reduce costs across all other areas. We have taken advantage of the recent drop in fuel prices to extend our hedging programme for FY10 to 90% for the first three quarters at an average price of $620 per tonne and 60% for Q4 at $610 per tonne. Should we hedge the balance of our FY10 fuel at $620 per tonne, we would lock in a full year fuel cost saving of approximately E.460m ($657m).’