Fuel costs dent Ryanair profits

Ryanair says its business will recover as oil prices fall

Profits at budget airline Ryanair have fallen 47% in the first half of the financial year, due to a doubling of the price of fuel.

Net profits in the six months to the end of September stood at 214.6m euros (£169m; $277m) compared with 407.6m euros a year earlier, the firm said.

Oil prices have fallen, but Ryanair said it expects to make a loss in the last six months of the financial year.

The Irish airline has also confirmed it is working on a new service to the US.

However, chief executive Michael O'Leary told BBC News Ryanair would only launch transatlantic routes if it could secure cheap long-haul aircraft from rivals.

"We haven't managed that yet, but we are hoping that in the middle of this recession... that that opportunity might arise in the next 12 or 18 months," he said.

'Cost advantage'

The number of passengers using Ryanair grew by 19% to 32 million between April and September.

Despite the economic slowdown, it expects passenger numbers to rise a further 9% this winter, as travellers switch from full-service airlines.

Airlines worldwide have struggled as fuel costs soared earlier this year.

As a result, a number of airlines have gone out of business, and Ryanair predicts more will follow in the coming months.

Oil prices peaked at more than $140 a barrel in July but have since fallen to less than $70.

Mr O'Leary said that if oil prices remained below $80 a barrel then profits would recover.

"We have a significant cost advantage over our competitors, many of whom have hedged fuel next year at significantly higher levels than current market prices," Mr O'Leary said.

"This will force competitors to further increase air fares and widen the price gap between them and Ryanair's lowest fares," he added.