Ryanair and British Airways will cut flights next winter due to the rising cost of fuel which is threatening to wipe out their profits this year, the two companies said yesterday.

Ryanair, Europe's biggest budget airline, said it would cut weekly flights at Dublin by 12 per cent this winter and it would also cut some at Stansted in the UK.

Separately, British Airways said it expected to reduce capacity by three to five per cent in its winter season.

BA chairman Martin Broughton said the airline is looking at extra fuel costs this year of more than £1 billion €1.25 billion, which is more than last year's record profit of £875 million.

"I don't want anybody to be under any illusions that, in the current operating conditions, it will be a considerable achievement for British Airways to break even this year," he said at the company's annual shareholders' meeting (AGM).

The British flag carrier will cut flight frequencies but it will not cut any long-haul routes, chief executive officer Willie Walsh told reporters at a press conference after the meeting.

But he added there could be "one or two" short-haul suspensions in the plan, which will be finalised in the next fortnight.

Ryanair, which made a net profit of €481 million in the year to the end of March, said its guidance was unchanged for this year.

"This year we are going to make very little or no money if oil stays around $130 to $140 a barrel," chief executive officer Michael O'Leary said.

Ryanair said earlier this year it hoped to break even in the current year through March next year, based on average fares rising some five per cent and an average oil price of $130 a barrel. Yesterday, oil was traded as high as $146.

All in all, Ryanair expects to ground just over 10 per cent of its fleet for the winter, Mr O'Leary said, adding he expects Ryanair to carry about 58 million passengers in the year, one million fewer than an earlier forecast.

The bulk of the cuts will come from Dublin and Stansted, though there will be expansion elsewhere. Earlier yesterday, Ryanair announced four new routes and increased capacity in the Swedish capital Stockholm.

Mr O'Leary reiterated that tough conditions would help Ryanair in the longer term against rivals which have higher costs or less cash.