The appetite for cheap flights has helped the low cost airline Ryanair to make record profits.

The company made 172m euros (�111m; $162m) in the past financial year compared with 123m euros in the previous 12 months.

It also saw the number of passengers increase by 38% to 11.1 million.

This is in sharp contrast to British Airways, which two weeks ago reported its biggest loss since privatisation.

At the lower end of the market, Easyjet and Go don't really compete with Ryanair

Michael O'Leary Ryanair chief executive

Ryanair's chief executive, Michael O'Leary, told BBC Radio 4's Today programme that the results were a tremendous success.

"Bear in mind this is a year that covers not only September the 11th, but foot and mouth disease in the first part of the year," he said.

He forecast traffic would grow by more than 35% over the next two years.

'Supermarket model'

And he dismissed the suggestion that the tie-up between rivals Easyjet and Go would make the market tougher for Ryanair.

"We're all competing with the high fare carriers, BA and Lufthansa.

Michael O'Leary says he can keep cutting fares

"But at the lower end of the market, Easyjet and Go don't really compete with Ryanair," Mr O'Leary said.

"We would be a low fare carrier and they're trying to be a slightly lower fare carrier at the main airports," he added.

The chief executive insisted that he had plenty of scope to go on cutting fares and increasing profits.

"I think we're following almost the supermarket model where you're piling it higher and selling it cheaper and making a little bit more money each time," he said.