The Dublin-based airline, famous for its no-frills service, posted a record annual profit on higher fares for the year to March, but warned its run of growth of at least 25 percent profit every year since 2009 was likely to come to an end.

"Recession, austerity, currency concerns and lower fares at new and growing bases ... will make it difficult to repeat this year's record results," said Chief Executive Michael O'Leary.

"If we were guiding a blue sky scenario with rising fares into next winter, we would be nuts," he said.

The airline confirmed it would pay out 483 million euros to shareholders in just its second dividend payout since floating in 1997. Its share price was down 4.32 percent at 0848 GMT compared to a flat Irish market .ISEQ.

Net profit reached 503 million euros for the year to March, up 25 percent on the previous year, compared with a forecast of 491 million by analysts polled by Thomson Reuters I/B/E/S.

But it warned worsening economic conditions in Europe and stubbornly high fuel costs would cut its profit to between 400 million and 440 million euros in 2013, making it the first year since 2009 that profit has fallen.

The airline is being "a little bit conservative" in its outlook due to poor visibility about its performance in the winter, O'Leary told analysts in a conference call. The possible collapse of some European rivals could yet boost revenues, he said.

FARE GROWTH TO SLOW

The airline, which has a lower cost base than many of its competitors, raised fares 16 percent over the year to help offset a fuel bill that was 30 percent higher.

But it warned it would be unable to pass on an additional 320 million euro hike in fuel costs expected in the coming year.

"There's a poor environment, it's the fourth year of this, and repeating (fare growth of) 16 percent is not going to happen," said Chief Financial Officer Howard Millar. He added fares would likely rise by closer to 3 percent.

Ryanair (RYA.I) is not as worried about the fallout of Greece's current political crisis as the fact that the euro zone is suffering its fourth year of poor economic performance, he said.

"Greece is very small for us ... we would be more concerned about places like Spain, its high unemployment and plans to raise taxes," he said.

Traffic will grow by 5 percent for the second year in a row to reach 79 million in the year to March 2013, he said.

British peer EasyJet (EZJ.L) this month said it expected revenue to rise in the six months to September as business travellers help it to overcome higher fares.

Higher cost rivals Air France-KLM (AIRF.PA) and Lufthansa (LHAG.DE) this month reported results battered by the global economic slowdown and sky-high jet fuel prices. (nL5E8G40SP) (nL5E8G31VM)

(Reporting by Conor Humphries; Editing by Hans-Juergen Peters and Erica Billingham)

• A Permanent Economic Emergency