DUBLIN (AP) -- Ryanair shares fell Monday after Europe's leading budget airline said it would ground 80 aircraft this winter and suffer reduced passenger traffic for the first time in its history.
Ryanair announced strong full-year results Monday including 23 percent growth in its net profit. But the Dublin-based airline said weak winter demand meant it would cost less to ground 80 jets -- more than a quarter of its fleet -- than to operate them at a loss from October to March.
Ryanair said the seasonal grounding would mean the airline carries 4 percent fewer passengers than in the previous winter, the first such drop since Ryanair's creation in 1985.
For the full fiscal year Ryanair said it still plans to carry a record 75 million passengers, versus 72.1 million in the year up to March.
Previously, Ryanair has transferred aircraft from loss-making winter routes to growth markets in the Mediterranean, keeping winter groundings to a minimum and passenger numbers consistently on the rise.
But O'Leary told reporters Monday that its fleet of Boeing 737-800s was growing too fast, with 272 already in operation and approximately 40 more coming by the first half of 2012. He said Ryanair had secured discounted rates for 90 percent of its fuel needs through the end of the year, but those costs were still too high to justify keeping the full fleet airborne.
"Instead of running around trying to open up new bases and routes in November and December, we'll sit them on the ground. With higher oil prices it makes no sense," he said.
Ryanair led the Irish Stock Exchange lower Monday. Its shares fell as much as 8.5 percent before partly rebounding to €3.35 ($4.69), down 5.6 percent.
For the fiscal year ending in March, Ryanair reported net earnings of €374.6 million ($524 million) compared to €305.3 million for the 2010 fiscal year.
Sales rose 21.5 percent to nearly €3.63 billion ($5.1 billion).
The 2011 net figure included an exceptional charge of €26.1 million ($36.5 million) related to the grounding of 14,000 Ryanair flights because of the Icelandic volcanic ash scare in April-May 2010.
Airline stocks across Europe were depressed Monday by news of another volcanic eruption in Iceland, although scientists were quick to caution that Sundays eruption was producing larger ash particules that are unlikely to remain airborne for long distances.