Page last updated at 11:49 GMT, Monday, 1 February 2010

Ryanair shrinks losses and raises profits forecast

Michael O'Leary pretending to fly on one of his planes
Ryanair's chief, Michael O'Leary, says customers' behaviour is changing

Budget airline Ryanair has raised its full-year profit forecast as passenger numbers continue to rise.

It said it expected full-year net profits of about 275m euros, as it reported a 10.9m-euro ($15.3m; £9.5m) loss in the October-December period.

The loss was much narrower than the 101.5m-euro deficit recorded in the same period in 2008.

Ryanair said the result had been helped by a 37% fall in fuel costs, which had offset a 12% cut in fares.

But although passenger numbers increased by 14%, spending on Ryanair's extras - such as paying for checking in baggage - rose by just 6%.

Ryanair jet takes off

Ryanair chief executive Michael O'Leary said the slower growth in what the airline calls "ancillaries" was due to "changes in consumer behaviour".

Extra charges

The carrier's new profit forecast compares with its previous estimate of "the lower end of the range of 220m to 300m euros," Ryanair said.

However, despite the higher forecast, the airline warned that market conditions remained difficult.

Even so, the Irish-based airline said it would continue to pick up market share from rivals, and expected to do particularly well in Italy, Scandinavia, Spain and the UK.

The company has been criticised for charging for a raft of extras on top of its basic ticket price.

Last month, the Office of Fair Trading Budget accused Ryanair of being "puerile and childish" over its payment policy, with customers only avoiding fees when they pay for tickets online if they use a Mastercard prepaid card.

In an interview with the BBC, Ryanair chief operating officer Michael Cawley said such criticism was not a concern to the company when it was expanding so fast.

He said it was the fastest-growing airline in Europe - and one of only two in the region that were growing at all.

Mr Cawley added that the fact passenger numbers had risen in the third quarter - and it was expecting another seven million more customers to fly with it in its next full year - spoke for itself.

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