The low cost carrier, which previously warned of a potential 60m euro (£47.7m) annual loss, said it also could return to "substantial" profits the following year if crude costs continued to fall.

But Ryanair expects any savings on fuel bills this winter to be offset by fare cuts as the group seeks to boost demand hit by a slowdown in the economy and consumer spending.

It is also yet to benefit from the declining oil price – down to below $100 this week for the first time since April – as it has fixed most of its third quarter fuel costs at $124 a barrel.

Shares in Dublin-listed Ryanair rose by more than 6 per cent as investors cheered the more upbeat outlook.

The airline had come under pressure after it cautioned in July over the impact of rising fuel costs on this year's profits.

Its fuel bill soared 93 per cent to 367m euros (£291.4m) in the three months to the end of June, hitting post-tax profits in the period, down by 85 per cent.

Ryanair chief executive Michael O'Leary said: "We believe there will be further airline bankruptcies in Europe over the coming weeks, as more of Europe's non-viable, loss-making airlines run out of cash or their credit facilities are withdrawn."

The group saw passenger traffic rise by 19 per cent year-on-year in August.