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Last Updated: Monday, 3 November, 2003, 10:48 GMT
Profits news gives Ryanair lift
Ryanair plane on the tarmac
Budget airline Ryanair has said it expects passenger numbers to grow strongly for the rest of the year, as it reported better-than-expected first-half profits.

But the Dublin-based carrier warned that profit per passenger would fall, as it cuts prices to fill seats on an expanded European network.

It has recently expanded services from Birmingham to Dublin and Spain, from Glasgow to Italy and Ireland, and from Stansted to Spain and Finland.

However it warned that it was still considering cutting "one or two French destinations" and routes to the Netherlands and Belgium, which it said were not busy enough.

Ryanair flies to 19 French destinations as well as three in the Netherlands and two in Belgium. It did not name the routes under threat.

The airline posted a 16% rise in underlying net profits to 175.5m euros (120m, $205.4m) for the six months to 30 September.

Passenger volume has also risen by 45% to 11.3 million, as the company aims to expand passenger numbers to 24 million this year from 15 million last year.

'Profits to grow'

Chief executive Michael O'Leary said: "Looking forward for the remainder of the fiscal year, we remain confident that traffic growth will continue to be strong, but cautious about fares and yields.

"We expect that average yields will continue to decline by between 10 and 15% compared to those charged last year.

"We remain equally determined that Ryanair will continue to be the lowest fare airline in every market in which we operate.

"Accordingly we expect profits to grow materially, as we continue to maintain our margins in excess of 20%."

Average fares declined by 12% for the half year and operating costs rose by 32%.

Air France complaint

The company is at the centre of an investigation by the European Commission into whether it received illegal state subsidies at its Belgian hub of Charleroi.

A decision is expected later in November.

In September Ryanair suspended services to Strasbourg after a French court declared its deal with the local airport amounted to illegal state aid, following a complaint by Air France.

Air France said its Brit Air subsidiary had been forced to cancel its London-Strasbourg link because of the deal between Ryanair and the Bas-Rhin Chamber of Commerce and Industry, which manages the French airport.

A Ryanair spokesman said: "We continue to await a final decision of the European Commission on the Charleroi investigation.

"But we remain confident that Commissioner de Palacio will put in place a framework that will encourage and enable publicly owned airports such as Charleroi and Strasbourg to compete on a level playing field with the many privately owned airports around Europe.

"These publicly owned secondary and regional airports must be allowed and encouraged to participate in the low fares, high growth, traffic and tourism revolution."

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