RYANAIR, Europe’s largest no-frills airline, said that record oil prices would wipe €40 million (£27 million) from the company’s profits this year, as the price of crude struck fresh record highs.

However, Michael O’Leary, the chief executive, said he was confident that the price of fuel would fall during the next 12 months and that he had no plans to introduce a surcharge.

Mr O’Leary added that Ryanair would not resume fuel hedging until oil neared $30 a barrel, well below yesterday’s high of $48.20.

Ryanair, which has been discounting fares to fill seats amid cut-throat competition, is currently hedged until the end of October at $26 a barrel. Fuel accounts for about 14 per cent of the airline’s cost base.

European airlines — including the strike-threatened British Airways — have been introducing fuel surcharges to help to compensate for higher fuel costs. But Ryanair has repeatedly refused to pass the higher costs on to passengers and has said that the oil price could rise to $80 a barrel and the airline would still be profitable.

The soaring oil price is taking a more serious toll on America’s beleaguered airlines as ballooning fuel costs compound sky-high staffing costs.

Hardest hit so far is US Airways, America’s seventhbiggest airline, which emerged from Chapter 11 bankruptcy protection in the spring.

David Bronner, the new chairman of US Airways, gave warning last night that unless its pilots and crew agree to another $800 million in wage cuts in the next 30 days the airline will be forced to close.

Mr Bronner, who is also head of the Alabama state retirement fund and saved US Airways with a $240 million cash injection last year, said he would not put any more money into the company unless the cost cuts are agreed.

He added that he would seek liquidation under chapter 7 of the US bankruptcy laws, which would see the airline closed down, all the staff sacked, with the assets freed to start a new airline under Mr Bronner’s control, with none of the current liabilities.

Oil hits record

Crude oil hit a record price once again yesterday, with New York futures soaring to $48.80 a barrel, before falling back to close at $48.70 — a rise of $1.43 on the day. Worries over Iraqi oil supplies continued as Muqtada al-Sadr, the rebel cleric, rejected an ultimatum to disarm immediately and withdraw without conditions.