Ryanair said pre-tax profits had fallen 5% to £150.8 million.

That excluded the £9.9 million cost of the earlier-than-planned retirement of six Boeing 737-200 jets, a £1.8 million charge for reorganising the recently acquired Buzz airline and goodwill costs of £1.53 million.

The airline said "a lot of hysteria" had been generated in recent weeks about higher oil prices.

It said it did not expect increases to damage or slow the growth of low fare air travel.

It added that it believed higher prices would "only hasten the demise of some of the current wave of loss-making start-ups and high fare flag carriers".

It said it would absorb any hikes by cutting costs in other areas and pledged that it would not impose fuel surcharges on customers.

The airline added that it believed oil prices would fall this winter or next year.

Ryanair said regulatory battles such as its recent dispute with the European commission over subsidies from the publicly-owned airport at Charleroi in Brussels would prove to be "temporary obstacles".

The airline said it was confident it would win its appeals on Charleroi and another dispute involving Strasbourg airport.

"As more and more airports compete to win our business, costs will fall because the existing competition rules allow publicly-owned airports to compete on a level playing field with privately-owned airports," Mr O'Leary said.

During the year, the airline opened two new bases at Rome Ciampino and Barcelona Girona and launched 73 new routes, boosting its network to 150 routes.

Ryanair said the new Italian and Spanish bases were performing extremely well, with current bookings indicating that load factors at both bases would top 85% during the summer.

The group said it was keeping its outlook for the coming 12 months "very conservative".

It said it expected passenger growth of about 20%, although seat capacity would only rise by 16% due to failure to agree lease terms with aircraft leasing company ILFC regarding jets formerly run by Buzz.

Ryanair said current load factors - how full its aircraft are - were higher than this time last year.

Tuesday June 01, 2004