Ryanair reported weaker average fares in January although it expects them to recover in February and March.
Chief executive Michael O’Leary said: “I think it will settle down as we go into February and when we go into Easter in March. I think the fourth quarter will be fine.”
Ryanair, which flies out of Leeds Bradford Airport, raised its full-year profit forecast after average fares in the three months to December rose by eight per cent.
The airline said that strong demand in Northern Europe lifted average fares dramatically in the last three months of 2012.
Ryanair, Europe’s biggest low-cost airline, has used its size and low costs to undercut struggling flag carriers.
It raised its profit forecast to ÂŁ460m for the year to March, up from an earlier ÂŁ417m to ÂŁ442m range.
This would represent a seven per cent increase on last year’s performance despite a 19 per cent rise in oil costs.
Chief operating officer Michael Cawley said: “We saw strong demand out of the UK, out of Germany and out of Scandinavia and that has gone straight to our bottom line.”
He added that strong demand in the run-up to Christmas and a high uptake of reserved seating options helped to raise ticket prices in northern Europe well above the company’s forecasts.
Sales were not as buoyant in Southern Europe, with Spain in particular very weak while and fare growth in Italy was flat.
Revenues rose 15 per cent to ÂŁ825m in the three months to December 31, better than the 9.2 per cent revenue growth its chief low cost rival easyJet reported last week.
Quarterly passenger numbers increased by three per cent to 17.3 million , while third quarter profits rose 21 per cent to ÂŁ15.4m in the period.
The airline has grounded up to 80 aircraft this winter as a result of high oil prices, airport fees at Stansted and Dublin airports and expectations for seasonally weaker demand.
As a result, it expects traffic will be three per cent lower in the current quarter, which is equivalent to around 400,000 passengers. The eight per cent increase in fares was up on the previous five per cent growth.
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