Ryanair suffered its first fall in annual profit for five years in 2013.

The budget airline, which serves the European market, said lower fares, a weaker sterling against the euro, and higher fuel costs resulted in an 8% drop in post-tax profit to €523m (£427m, $717m) in the year to 31 March 2014.

Michael O'Leary, chief executive of Ryanair, said he had cut fares and improved the customer experience – such as by introducing allocated seating and reducing its travel fees – and as a result passenger traffic grew by 4% in the second half of its financial year.

Over the year, Ryanair introduced 121 new routes, established bases at eight new locations including Brussels and Athens, and ordered 180 new aircraft for delivery by 2018.

The airline has seen its annual passenger traffic hit a record 82 million for its most recent financial year - a 3% increase across the year.

O'Leary has previously announced his intention to offer £10 flights to New York and Boston in the US once Ryanair has the aircraft capable of flying long-haul.

Passengers with the ultra-cheap tickets would pay extra for everything from meals to baggage.