It puzzles me how Ryanair will be able to continue to grow profits for shareholders from here. Rising fuel costs have to hurt and surely they are tapped out on new routes across Europe. Do you see Ryanair ever developing a long-haul service, and how would that work with their low fare model?!!
Higher fares. Since other airlines are rising their fares as well, Ryanair can do it while still being the cheap option. Where it may hurt are the routes driven by the low fares, where a large number of people only flew somewhere because it was cheap. But again, the definition of cheap is changing so who knows.
In a way, I find the current market situation favouring Ryanair. As more people need to cut their costs, and while legacy carriers' fares are skyrocketing, there will be even more people favouring price over everything else, and Ryanair still holds the advantage of having a much better cost per seat, thus is able to offer better fares than the competition. Therefore, they may be able to compensate for the loss of some leisure demand, by being able to attract new customers on "essential journeys".
By the way, are aviation fuel prices still rising?