LOW-FARES AIRLINE RYANAIR has reported an increase in profits of 26 per cent in the year up to March 2011 – making €401m after tax in the year.

Announcing its 2010 annual results this morning, Ryanair said passenger numbers in the year to March 31 were 72.1 million – up by eight per cent on last year – while revenues rose from just under €3bn last year to €3.63bn this year.

The airline said this morning it was pleased with the year, highlighting the purchase of 40 new aircraft – bringing the total fleet to 272 – while the airline had begun operations to eight new bases, mostly in Spain and the Canary Islands.

Chief executive Michael O’Leary was particularly enthusiastic about the growth in Ryanair’s passenger numbers given the decline in overall passenger numbers through its main base at Dublin Airport.

The repeated closure of European airspace in the twelve-month window due to inclement snowy weather last Winter – and the ongoing staggered closures as a result of the ash cloud from Eyjafjallajokull last year – also meant that the increase was satisfactory.

The airline now has a cash reserve of around €3bn, having returned €850m to shareholders in the last few years – a cash reserve which should benefit from increasing interest rates in the months to come.

Ryanair warned, however, that the increasing price of oil on world markets would mean an inevitable surge in the cost of airline fuel – meaning that the current growth rates would almost completely flatten in the accounts for next year.

Excluding fuel, it expects unit costs to rise by around 2 per cent due to rising staff costs.