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Ryanair says fares fall more than expected but profits on track

"We are cautious into the balance of the year", Chief Financial Officer Neil Sorahan said in a phone interview.

While traffic increased by 16% to 29m, its average fare dropped to 33 euro per passenger - and the firm has said prices are set to go even lower.

Ryanair CEO Michael O'Leary said: "As previously guided, our fares this winter have fallen sharply as Ryanair continues to grow traffic and load factors strongly in many European markets".

A weaker pound means that fares paid by United Kingdom customers translate into lower income for Dublin-based Ryanair - which is Europe's largest airline by passenger numbers.

The good news for passengers over the coming months is that Ryanair will continue to slash fares in an attempt to stimulate demand in a jittery European market, beset by a lack of clarity on how the United Kingdom will leave the European Union and a recent spate of terrorist attacks across the continent. In recent weeks its rivals Easyjet and Wizz have warned shareholders that full-year profits would be hit by the fares battle.

The carrier said load factors rose 2% to 95%, a third quarter record.

Ryanair noted that customers would continue to see cheap fares, which were "falling faster than we initially planned".

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"Europe's airlines have either been taking on too much new capacity or have not been retiring loss-making capacity over the past two years because oil prices were falling".

Ryanair maintained its full-year profit forecast for a range of €1.30-1.35 billion, but said that outlook heavily depended on the absence of any unforeseen security events.

Ryanair reiterated that it expects to grow more slowly in the United Kingdom than it once planned following the country's June 23 vote to quit the European Union.

Ryanair said its costs per passenger were down 12 percent in its third quarter, half of that due to fuel.

British airlines are waiting with bated breath to discover whether the United Kingdom will remain a member of the EU's Open Skies aviation free market.

Mr O'Leary said: "We continue to grow capacity, new routes and bases, at a time when other European Union airlines are also adding capacity, and accordingly the price environment remains weak".

Ryanair anticipates this weakness in pricing continuing into the summer and perhaps beyond.

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