02 June 2009 | Martha McKenzie-Minifie
Budget airline Ryanair has extended its fuel-hedging scheme in a bid to cash in on falls in prices.
Announcing its results in the year to the end of March, the carrier said its fuel costs rose 59 per cent during the period - up ?466 million (£403.3 million) to ?1.3 billion (£1.1 billion).
The full year net profit of ?105 million (£90.9 million) was down 78 per cent on the previous financial year but "ahead of market expectations".
Ryanair said "substantially higher" oil prices saw fuel costs account for 45 per cent of operating costs in the year to the end of March, compared to 37 per cent in the previous financial year.
Chief executive Michael O'Leary said in a statement: "We have taken advantage of recent falls in jet fuel prices to extend our hedging programme for the financial year to 2010 to 90 per cent for the first three quarters."
Hedging commits an airline to paying a pre-determined price for future jet fuel purchases.
O'Leary continued: "Assuming that we hedge the balance of our fuel requirements at current rates this would reduce our fuel bill by approximately ?450 million (£389.4 million)."
Last week, Virgin Atlantic released details of how a successful fuel-hedging strategy helped it to boost income.
British Airlines also released its preliminary results last week, with chief executive Willie Walsh calling for greater efficiencies on the back of a pre-tax loss of £401 million.