Ryanair’s half-yearly profits have dropped almost 50% to £169m after fuel costs ran higher than expected. However the low-cost carrier said it was confident of breaking even in the full year, quelling earlier warnings of a possible loss.
“Fuel prices have been much higher, and our profits have been lower. If oil prices remain at approximately US$80 per barrel next year then our earnings will rebound strongly,” said Chief Executive Michael O’Leary.
The airline made a profit of €214.6m (£169m) in the six months to September down from €407.6m a year ago.
O’Leary said the airline would to continue cutting fares to take business from rivals struggling in the economic downturn. He expected average fares in the second half to fall by between 15-20 percent, leading to losses in each of those two quarters.
He said: “The recession will continue to drive down oil prices and fares this winter. We will continue to respond with lower fares and aggressive price promotions to keep Europe flying and to maintain our market leading load factors.
“Our full year average fare could fall by almost 12 percent, although these lower fares will be largely offset by lower fuel costs (currently US$73 per barrel in Q4),” he said.
The Dublin-based airline has taken a hedge for 25 percent of its fuel needs for the first half of the 2010 fiscal year at an average US$77 per barrel, it said.
Passenger figures for October rose 18% to 5.35m from 4.52m for the same month last year, with load factors remaining unchanged at 85%.