Ryanair said today said it would break even in the current year if oil remains at $100 a barrel, and would return to profitability next year if the price continues to fall.
Chief Executive Michael O'Leary said in a statement for the annual general meeting that the group remained unhedged on the oil price for the fourth quarter to end March, although he warned that savings on cheaper fuel may be offset by declining passenger numbers as economies go into recession.
"While profitability declines steeply in the current year, our cost-reduction programme and significantly lower oil prices - if they persist at under $100 per barrel - should lead to a return to substantial profitability next year," he said.
Ryanair shares climbed more than 5 per cent to €2.7 by 11.24am. Mr O'Leary echoed the widely held industry view that the run of airline bankruptcies was set to continue.
"We believe there will be further airline bankruptcies in Europe over the coming weeks, as more of Europe's non-viable, loss making airlines run out of cash or their credit facilities are withdrawn," he said.