Low-cost carrier Ryanair has seen profits fall for the first time in five years after a fierce price war ate into margins.

The Irish airline reported a net profit of €523 for the year to March 31st, down from €569 million last year.

Two profit warnings in the past year had dampened expectations.

Outspoken Ryanair chief executive Michael O’Leary said the firm had “worked hard to improve customer experience” in the past year as the airline attempts to soften its sometimes negative image.

During the year, the firm stepped up efforts to hang on to existing customers and to gain new ones by introducing measures such as allocated seating and cuts to excess baggage fees.

The carrier also started to allow people to bring a small, second carry-on bag.

Ryanair revealed it expects to boost its passenger numbers by four per cent in the coming year to over 84.6 million people.