LOW-cost airline Ryanair said its prospects appeared more positive than a year ago after it posted a 19 per cent rise in annual profits.

The Dublin-based carrier - led by chief executive Michael O'Leary - exceeded forecasts with profits of 268.9 million euros (£184m) for the year to March 31.

It warned high fuel costs continued to be a threat to its business but added advance bookings for the summer months had been strong, allowing it to raise its forecast for annual passenger numbers to 35 million, up 27 per cent on this year.

Mr O'Leary said: ''Our outlook for the coming for 12 months is more positive than it was this time last year."

He believed the airline had benefited from the imposition of higher fuel surcharges by rival airlines on short-haul routes. The company, founded 20 years ago, has also seen a number of European flag carriers reduce capacity on some of its markets.

Mr O'Leary said: "Clearly fuel costs remain high, and the market is volatile. Higher oil prices will continue to impact our cost base over the coming 12 months."

While the airline has not hedged its fuel position for the summer, it has bought 75 per cent of this winter's fuel requirement at rates of $47 a barrel.

Operating costs rose 25 per cent as a result of the higher fuel prices.

Last year Ryanair posted lower profits for the first time since the airline floated on the Irish Stock Exchange in 1997.

Although fuel has gone up 52 per cent in the past 12 months, deputy chief executive Michael Cawley insisted the carrier would double its passenger numbers over the next seven years.