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There’s bad news to come out of Ryanair as the no-frills airline just posted its first ever annual loss. The overriding factors behind the loss were the higher fuel costs that the company had to put up with during 2008 along with the lowering of the value of its stake in Aer Lingus.

The net loss made in the year up to 31 March was €169 million, which compares to a profit of €481 million the previous year. This loss was greater than many analysts had been expecting. However, despite this figure, the annual sales rose by 8.4% this year.

The fuel costs were the deciding factor, with Ryanair stating that this rose from €791.3 million to €1.26 billion this year. There were huge fluctuations in the price of oil throughout 2008: in July 2008 fuel costs rose to $147 a barrel, but later in the year they dropped down again as the recession took its hold.

Ryanair currently has a 29.8% stake in Aer Lingus, whom it has approached to take over a couple of times now, but it was also forced to write this down by €222 million after the share price of the company fell.

However, if the Aer Lingus factor and the fuel price were taken out of the equation, Ryanair would have made a profit of €105 million, which would still have been a fall on the year before but a profit nonetheless.

Michael O’Leary, the chief executive of Ryanair, said that the airline wants to “drive fares materially lower” despite the recession. He also stated that the company is growing strongly, stating that this year it will “carry twice the total number of passengers as British Airways”.