Ryanair's Full Year Profits Up 43 Percent

Ryanair reported a 43 percent increase in net profits to EUR€1.24 billion (USD$1.39 billion) in the year ended March 31.

The Irish airline, Europe's largest by passenger numbers, also said it is prepared for a fare war to break out later this year and will cut its own fares sharply to increase its market share to sustain profits, it said.

The cuts in fares, which will be focused on the winter season, will heap further pressure on rivals who have already warned about the impact of increasing competition on fares and have trimmed some plans for increases in capacity as a result.

Ryanair's profit growth will also slow to 13 percent in the year to end-March 2017, with its fares expected to fall by an average of 7 percent over the year and by between 10 percent and 12 percent in the winter months compared with a year ago, chief executive Michael O'Leary said.

"If there is a fare war in Europe, then Ryanair will be the winner," he said in a video presentation following publication of its results. Any revision to the forecast for average fares was more likely to be down than up, he added.

The lower fares will enable Ryanair to boost its passenger numbers by 9 percent to 116 million passengers, increasing its leadership of European aviation in terms of traffic.

Rivals including IAG, Lufthansa and Air France-KLM have warned recently about the impact of increasing competition on fares.

Lufthansa chief executive Carsten Spohr told reporters last week there was "too much capacity in the market."

O'Leary also said he was more cautious than rivals about the summer period, when European airlines make almost all of their profit, saying fares in the three months to the end of September would be "flat if not slightly down."

He warned, however, that the combination of falling fares and increasing oil prices could weigh on profitability in the year to March 2018.