Ryanair, Europe's largest low-cost airline, has clocked a fiscal first-quarter profit after its fuel costs tumbled.

First-quarter net income stood at €123 million (Dh642m) from a loss of €90.5m in the same period a year earlier. The sources said that Ryanair is slashing its fare prices to lure passengers among a slump in demand caused by the global recession. The carrier said its fuel costs have witnessed a dip by 42 per cent compared to the same period a year ago when the price of crude oil was climbing towards a record.

Ryanair extended its fuel hedging programme for fiscal year 2010 to take advantage of lower oil prices, after benefiting from not hedging last year when prices were at record high.

The airlines fuel costs dropped by 42% in the three months ended June 30, its fiscal first quarter, compared with the same period a year ago when the price of oil was climbing toward a record, contributing to its return to profit.

Fuel costs for the first quarter dip to €214 million.

Ryanair cut full-year profit forecasts to the lower end of its range yesterday due to falling yields, sending its shares down 10 per cent and impacting the broader airline sector. As per reports in media, Ryanair may outperform Europe's biggest carriers after expanding routes while rivals parked planes.