PROFITS at Ryanair have soared by 13% to €569 million (£480m) after tax during a year that saw the no-frills airline pledge its future to Prestwick Airport and commit to expanding its operations in Edinburgh.

Europe's biggest budget flight operator overcame rising oil costs and recession across the continent to deliver the profits rise and a 13% increase in revenues to €4.88 billion for the year ended March 31.

Ancillary revenue, including baggage check-in fees and printing boarding cards, rose by 20% to €1.064m or 22% of total revenue.

Ryanair reported that air traffic had risen by 5% to 79.3 million passengers against a backdrop of increasing fuel costs.

The airline said unit costs increased by 8% due mainly to an 18% or €292m rise in the cost of oil.

The results came after chief executive Michael O'Leary, who has run Ryanair for nearly 20 years, said that he was likely to stay in the top job for another five years.

The period saw Ryanair reinforce its commitment to Scotland by adding six routes over the year, including Prestwick to Barcelona, Bydgoszcz, Corfu, Chania and Warsaw, and Edinburgh to Szczecin.

This summer the airline will add six new routes from the airport – Bologna, Beziers, Cagliari, Corfu, Katowice and Santander – and increase the frequency of flights to five destinations, under a deal announced in December.

Last year the company brought seven new bases on stream and added a total of 217 new routes to its schedules. It took delivery of 15 new aircraft, taking its fleet to 305 by the end of its financial year.

Dublin-based Ryanair said it is confident of growing passenger numbers to 100 million over the next five years amid short-haul restructuring from high-fare competitors and after ordering 175 new aircraft from Boeing.

The planes, which will be delivered between autumn 2014 and the end of 2018, will expand Ryanair's fleet to more than 400 aircraft, with the company confident that the additions will provide greater return to shareholders by returning 5% of traffic growth per year.

But Ryanair warned that passenger growth would be more challenged in the short term.

The airline expects growth in the first half of 2014, which includes this summer, to be slower at around 2%, increasing to 5% in the second half amid the expectation that it will not ground as many aircraft in winter compared with previous years.

Higher costs, including rising oil prices and what the company described as "unjustified Eurocontrol and Spanish airport charges", are expected to constrain Ryanair's full-year growth in 2014 to 3%, which will translate as traffic growth of 81.5 million.

The company also noted that the timing of Easter, which had boosted its fourth quarter revenues, would mean net profit would be lower in the first quarter of 2014, compared with the opening three months of last year. The spring holiday had been included in its first quarter results last year.

Chief executive Michael O'Leary: "With almost zero yield visibility into H2 [second half] and the EU-wide recession, we expect that there will continue to be downward pressure on yields which will dampen full-year profit growth.

"We expect modest yield and traffic growth for the full year to be partly offset by higher oil and Eurocontrol costs resulting in another year of profit growth in FY '14 (full year 2014) which –subject to winter yield outturns – should increase to a range of between €570m to €600m."

Analysts at brokers Espirito Santo and Panmure Gordon noted the caution expressed in Ryanair's outlook for the year ahead but retained their recommendation to buy the company's stock.

Panmure Gordon said in a note to investors: "Despite the tough market conditions we expect average fares to rise in the coming years, driven by a relative modest capacity growth and higher competitor fares, which should translate into attractive and sustainable profit growth over the medium term."

Shares in Ryanair closed up 0.42 cents at €6.75.