Ryanair Nets Profit

Rising passenger numbers and lower fuel prices helped Ryanair to make a €136.5m (£118m) net profit between April and June, up from €21m last year.

The budget carrier saw an 11% growth in passenger numbers from the same period a year earlier - though revenues fell.

However, the airline - which flies from several Irish locations, north and south - said full year profits would be impacted by aggressive action to slash fares to attract cash-strapped fliers.

Annual net profits were now expected at the lower end of market forecasts for between €200 million and €300 million.

It warned annual profits would be less than anticipated, as it has been forced to cut fares to lure passengers.

The carrier reduced fares by 13% on average over the three months to 30 June.

On the plus side though, the carrier spent 42% less on fuel - having decided not to hedge its bills when oil prices were high.

It has also cut back on some services and just last week it said it was reducing its winter service out of Stansted airport.

A Ryanair statement said its outlook remained "cautious", adding that while growth in passenger numbers was "strong", the recession meant it had to keep prices low, limiting profitability.

"In a very deep recession any airline making a profit is a good result," said Deputy Chief Executive Howard Miller.

"The industry is going through a lot of turmoil and Ryanair will be unique in Europe as the only airline making a profit this year."

The carrier also repeated warnings about the impact of air passenger duty - which will increase from £10 to £11 in the UK for short-haul flights from November.

A similar tax, of €10 euros, was introduced in Ireland in April, and Ryanair has predicted a 20% fall in passenger numbers from Irish airports this winter as a result.

(BMcC/KMcA)