You know times are tough in the airline industry when European low-cost powerhouse Ryanair raises the white flag. That’s exactly what the carrier did on June 3 when the carrier said its goal was to break even this year as fuel costs continued to rise . The airline also posted a 20 percent increase in net profit excluding one-off items to $748 million in the 12 months until Mar. 31 compared to $626 million a year earlier.

The announcement could well be the canary in the coal mine for other airlines. Most analysts expect Ireland’s Ryanair -- and its low-cost British rival Easyjet -- to weather the double whammy of rising oil prices and slowing economic growth better than the legacy carriers. Their stripped-down business models, coupled with passengers switching to low-cost flights to reduce travel costs, were expected to keep Ryanair and Easyjet flying high.

Yet even the Dublin-based carrier appears to have succumbed to the woes facing the broader airline industry. According to Ryanair, fuel now represents more than a third of the airline’s operating costs and every $1 increase in the price of crude above $65 adds $21.8 million to annual operating costs. Ryanair also is mostly unhedged on jet fuel -- a strategy that makes the carrier highly susceptible to oil price volatility.