Ryanair chief executive Michael O’Leary announced the results earlier

Ryanair has reported a 25 per cent increase in full year profits to €503 million.

Revenue at the Ireland-based low-cost carrier increased 19 per cent to €4.3 billion, as traffic grew five per cent and average fares rose 16 per cent.

Unit costs rose by 13 per cent due to a 30 per cent increase in fuel costs and a six per cent increase in sector length.

Announcing the results Ryanair chief executive Michael O’Leary, said: “Our fuel bill rose over €360 million as oil prices increased 16 per cent.

“Excluding fuel, adjusted unit costs were flat during the year due to aggressive cost control, despite a modest company-wide pay increase, higher Eurocontrol fees and increased airport costs. Ancillary revenue outpaced traffic growth, rising by 11 per cent to €886 million or 21 per cent of total revenue.”

The outlook for the aviation industry as a whole, however, remained challenging Ryanair said.

“We expect more European failures in 2012, as higher oil prices and recession continues to expose failed airline models as well as subscale or peripheral carriers,” read a statement from the company.

The statement follows the closure of Malev (Hungary), Spanair (Catalonia), and Cimber Sterling (Denmark) last year.

IAG has also announced bmi Baby will close later this summer if sale negotiations are unsuccessful.