Aer Lingus said yesterday it made a profit in 2010, but warned high fuel prices and airport taxes will eat into margins in 2011.
The airline's shares ended the day down nearly 6% despite making a pre-tax profit of €30.4m (£25.8m) over the year compared to a loss of €154.8m (£131.4m) in 2009, an improvement which was said to be a result of reducing costs and increasing passenger revenue.
Passenger numbers fell 10% to 10.4m, but average revenue per passenger climbed 12% and costs fell by more than €100m (£85m).
But investors were concerned by the company's comments regarding increasing costs for 2011.
"We expect significant challenges in 2011," said Aer Lingus chief executive Christoph Mueller.
"Trading for the year is likely to be impacted by fuel price inflation and increased airport charges in combination with difficult conditions in our home market.
"We do not expect that improvements in yield performance and ongoing cost savings can offset these increased costs."
Fuel is the biggest concern. The airline said it has hedged 62% of its forward fuel needs for 2011 at $788 a tonne, but with jet fuel currently at $1,000 a tonne, top up purchasing is expected to push up costs significantly.
And an increase in airport taxes at both Dublin and Heathrow is "causing major concern and eating up entirely the staff cost savings made over the last year," Declan Murphy from Aer Lingus told the Belfast Telegraph.
In terms of the airline's Belfast base, Aer Lingus didn't give any specific results but said it was "meeting expectations" and looked ahead to the opening of a new route to Las Palmas this summer.
Overall, attention was focused on costs for the year ahead.
"Despite returning a pre-tax profit for 2010, all eyes are now on the current trading year," said Hal Catherwood, head of investment managers Brewin Dolphin in Belfast. "If the oil price stays high it will start to impact on profits. We would imagine that profit forecasts will start to be lowered."
Such a move already looks to be in the pipeline.
"We are likely to move our €43m (£36.5m) operating profit forecast to the low €20ms," Dublin-based Goodbody Stockbrokers said in a note to investors.