Ryanair reported lower Q1 profits, with a drop of 21 per cent to €78 million in spite of the fact that traffic grew three per cent to 23.2 million. Average fares fell four per cent due to the timing of Easter and the impact of the June French ATC strikes but revenue per passenger rose one per cent due to strong ancillary growth. Unit costs rose four per cent mainly due to a six per cent increase in fuel costs.

Ryanair’s CEO, Michael O’Leary, said: “Ancillary revenues grew by 25 per cent to €357 million (27 per cent of total revenues) driven by the successful development of reserved seating, priority boarding, and higher admin/credit card fees.”

The airlines said its seven new bases in Eindhoven and Maastricht (Holland), Krakow (Poland), Zadar (Croatia), Chania (Greece), Marrakesh and Fez (Morocco) were performing well.

“We plan to announce more new routes and new bases later this year as we exploit significant growth opportunities in markets where competitors are cutting back. We are in ongoing negotiations with the owners of Stansted airport to reverse six years of record traffic declines, but there is no guarantee that any deal will be agreed,” he said.

Shareholders recently approved an order for 175 Boeing 737-800 aircraft for delivery over a five-year period between September 2014 and December 2018. Growth targets have been raised 38 per cent to 110 million passengers by FY 2019 and the fleet to 410 (previously 375).

The airline said the outlook remained cautious for the full year as market conditions are tough with recession, austerity, high fuel costs, and excessive Government taxes (most recently in Belgium) impacting air travel demand and yields.