Ryanair raises profits forecast

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RYANAIR boss Michael O’Leary hiked his airline’s forecast for annual profits today after a better-than-expected summer for the low-cost carrier.

With passenger numbers up 7 per cent to 48 million in the six months to September 30 and a 6 per cent rise in average fares accompanied by a lower than expected fuel bill, half-year profits rose 10 per cent to 596 million euros (£478m).

Mr O’Leary said there was very little visibility on winter bookings but added that Ryanair would now make full-year profits of between 490 million and 520 million euros (£392m-£416m), up from 400 million to 440 million euros previously forecast.

The airline will ground up to 80 aircraft this winter as a result of high oil prices, airport fees at Stansted and Dublin airports and seasonally weaker demand.

It expects traffic will be broadly flat over the current half year, leading to growth in full-year passenger numbers of 4 per cent to 79 million. Summer bookings exceeded expectations, partly due to a post Olympics surge in demand.

The airline added: “We expect market conditions to remain tough as recession, austerity, high fuel costs, and excessive Government taxes dampen air travel demand. Further airline failures and consolidations are inevitable.”

The Dublin-based carrier, which operates more than 1,500 flights a day across 28 countries, recently said it would add nine new routes to its airports in Manchester, Liverpool and East Midlands. Ryanair flies from a number of regional airports including Leeds-Bradford.

Half-year costs were up 8 per cent, mainly as a result of a 24 per cent or 218 million euros (£175m) increase in its fuel bill.

Ryanair’s shares were 9 per cent higher today.