Ryanair has moved to protect itself from another winter of oil price volatility by hedging three-quarters of next winter's fuel requirement.

The low-cost airline said yesterday that it had hedged 75 per cent of its fuel needs for the October to March period, at a price of around $47 (€38) a barrel. It remains unhedged for the remainder of this summer.

However, it has been benefiting from recent oil price declines.

"We will continue to exploit our hedging policy where we believe it can remove uncertainty from our business at acceptable cost levels," Ryanair said.

Despite the turbulence caused by oil price volatility in recent months, yesterday's full-year results showed that Ryanair is still flying high.

Shares in the airline jumped by 3.4 per cent to close at €6.46 as it delivered a 19 per cent increase in both profits and passenger numbers despite a 52 per cent jump in its fuel bill.

Net profit at the low-cost airline in the year to the end of March rose to €268.9 million from €226.6 million, beating the market consensus of €248 million.

Meanwhile, revenue was up by 24 per cent to €1.34 billion despite what the airline described as "intense competition and significantly higher oil prices".

Passenger numbers rose by 19 per cent to 27.6 million, helped in part by other airlines decision to impose fuel surcharges, while yields were 2 per cent higher than the previous year.

The departure of a number of European flag carriers from routes where they were competing head-to-head with Ryanair also helped boost the yield performance, the airline said.

Ancillary revenues grew by 39 per cent to €208.5 million, with strong performances from car hire, travel insurance and hotels, in particular.

This is an area of its business that Ryanair expects will continue to grow strongly - at twice the rate of increase in its passenger traffic.

Among the areas being considered by the airline is the British mobile phone market. Ryanair chief executive Michael O'Leary confirmed yesterday that the airline was in talks with up to four mobile phone companies in Britain but did not expect any imminent entry into this fiercely competitive market.

Although the higher oil price pushed operating costs up by 25 per cent to around €1 billion, the airline's after-tax margin fell by just one percentage point to 20 per cent.

The company sounded an upbeat note about the year ahead. "Our outlook for the coming 12 months is more positive than it was this time last year," Mr O'Leary said.

"We continue to budget for higher oil prices but anticipate that these higher costs will be partially offset by a slightly more benign yield environment."

The airline believes yields will remain flat over the next three to four months, particularly if its competitors retain surcharges and continue to remove capacity, although it still expects an overall fall of 5 per cent this year.

The company's balance sheet remained strong with year-end cash of €1.6 billion.