Ryanair Chief Executive Michael O'Leary will freeze the pay of senior executives at Europe's biggest low-cost carrier as he seeks to counteract high fuel costs that could lead to a halving in profits this year.

"Our guidance remains the same from our last," O'Leary told a news conference in Brussels on Wednesday. "We will update this in June at our results, but I expect a 50 percent drop in profits in the next 12 months."

Dublin-based Ryanair warned in February that high oil prices, a faltering UK economy and weak sterling meant net profit would rise by 6 percent at best this year and that, under its worst-case scenario, it could fall by 50 percent.

"The next 12 months will not be pretty for net profit and will not be pretty for shareholders," O'Leary later said. "We will have a better feel for it in June. I don't have that feel at the moment."

A spokeswoman for Ryanair said the company's range of earnings guidance was unchanged from the range given in February.

Despite continued concerns over fuel costs, O'Leary said he did not foresee any direct increases in Ryanair fares, although some charges would rise.

"I think our fares will be flat and that will be a good result I think," O'Leary said.

Ryanair shares, which have fallen 15 percent since February's guidance and have almost halved in value over the last 12 months, closed 2 percent lower at 2.93 euros in Dublin versus a 1.6 percent fall for the broader Irish market.

O'Leary said Ryanair hopes to claw back EUR400 million (USD$630 million) in costs over the next 12 months through savings measures, including an indefinite management pay freeze that he said could recoup up to EUR10 million.

"We are renegotiating airport contracts, handling contracts, maintenance contracts... we want to reduce costs in every single area of the operation," he said.

"Baggage fees and credit-card charges will go up. Partly to reduce costs but more importantly to encourage passengers to take hand luggage and reduce our check-in costs. We will move to kiosks very soon."

O'Leary warned his airline could leave any airport unwilling to "work with Ryanair on reducing costs."

He expected Ryanair to remain largely unhedged for the rest of 2008 once its current insurance against high fuel prices expires at the end of this month.

"I reckon we will take our chances on current price of oil for the rest of the year," O'Leary said, adding Ryanair would probably hedge again if the price of oil dropped below USD$80 a barrel.

On the upside, O'Leary said current global economic uncertainty could create the right conditions for him to push ahead with his plans for a separate transatlantic airline.

"Given the current economic situation, I would expect that there will be (aircraft) orders cancelled and that will create an environment in which to buy," he said.

When other airlines cancelled orders in the wake of the September 11, 2001, attacks in the United States, O'Leary made what is seen as one of his most astute business moves, seizing the chance to secure new aircraft from Boeing at rock-bottom prices.