RYANAIR CHIEF executive Michael O’Leary has told shareholders that the company will save about €460 million on its fuel bill in the current financial year as a result of recently hedging 90 per cent of its oil costs at $62 a barrel for the fourth quarter.

“Those savings are now locked in,” Mr O’Leary told reporters after Ryanair’s annual general meeting, which was held in Dublin yesterday.

Oil prices peaked at $147 a barrel in July 2008.

Ryanair’s fuel costs rose by €466 million last year to €1.257 billion and accounted for 45 per cent of its operating costs.

Mr O’Leary also reiterated previous guidance on profits, which he expects to double in the year to the end of March 2010 compared with the previous 12-month period.

“We expect the profitability will be somewhere between €200 million and €300 million, towards the lower end of that range,” he told reporters after the shareholder meeting.

“Profits, we hope, will double this year over last year’s figure.”

Ryanair made an after-tax profit of €105 million in the year to the end of March 2009.

Mr O’Leary said Ryanair would carry 66 million passengers in the current year, down slightly on the 67 million figure previously guided to the market at the time of its full-year results in June.

He said this was a result of scaling back capacity this winter at a number of “high-cost” airports, including Dublin and Stansted.

Mr O’Leary was asked by a shareholder why the airline continued to retain €2.5 billion in cash on its balance sheet.

“The only way to strongly position yourself in this market is to have bundles of cash,” he said. “That’s why we need these big cash balances.”

Mr O’Leary said Ryanair would continue to cut its fares in spite of the economic downturn. The airline’s fares this year have been cut by 13 per cent to €37 per passenger.

“Recessions are good for Ryanair,” he said.

“They allow us to expand rapidly as people become more price-sensitive.”

Mr O’Leary said he expected to increase Ryanair’s passenger traffic by about 15 per cent this year.

Looking to the future, Mr O’Leary predicted that there would be four “very large airline groups” left standing when the global recession ends.

“All of the other airlines will either go bust or join one of those four groups,” he said.

“There will be more bankruptcies over the coming months, including some close to home.”

Mr O’Leary also said it was “highly unlikely” that Ryanair would make a third bid for Aer Lingus.