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Ryanair raises profit forecast as drive to improve image begins to pay off Ryanair raises profit forecast as drive to improve image begins to pay off
(about 4 hours later)
Ryanair has vowed to cut average fares by up to 10 per cent as part of a bid to fly an additional five million passengers over the winter period. Ryanair, which has taken on a business overhaul to soften its image, has pushed up annual profit forecasts by  €100 million (£78 million) as the strategy begins to pay off.
The Dublin-based carrier believes there are "many opportunities" open to it, such as competing more vigorously at primary airports and in attracting business traffic which tends to travel more during the winter period. The upgrade, Ryanair’s third in four months, comes after the carrier’s half-year profit soared by 32 per cent to  €795 million and prompted its shares to shoot up 9 per cent to €8.28.
Its "ambitious" new forecasts for the six months to March 31 include the plan to fly an additional 2.2 million passengers compared with its previous estimate - leading to a total rise of 16 per cent or 5.3 million customers on a year earlier. The airline said its introduction of customer services, which boss Michael O’Leary, called “stopping unnecessarily pissing people off”, had bought more business travellers on board.
It now expects annual profits of up to 770 million euros (£602 million), a rise of 18 per cent on its previous guidance. Profits for the summer half-year were 32 per cent higher at 795 million euros (£621.6 million), the company added. And Ryanair looks set to unleash a price war this winter as it adds bases at more major European airports to lure more business travellers from rivals, saying it will “use lower fares to achieve our significantly higher traffic targets”.
The airline's recent drive to improve its image is showing signs of paying off, having softened its stance on baggage charges and booking conditions and introduced allocated seating and a new business service. Passenger numbers are expected to rise by 12 per cent in the current quarter and 20 per cent in the last three months of the year, helping it to upgrade its annual profit forecast to €750 million-€770 million, compared with last year’s €523 million.
Ryanair said average fares will fall by between 3 per cent and 5 per cent in the current quarter before an aggressive promotional drive will cut fares by between 6 per cent and 10 per cent in the new year.
As a result, the airline expects to carry 89 million customers in the year to 31 March, a rise of 9 per cent on a year earlier and the second such upgrade since September.
Average fares will be up by 1 per cent to 47 euros (£36.76) across the year as a result of higher prices over the Easter period.
Additional reporting PA