Ryanair the budget carrier in Ireland, reported yesterday that their profits fell by 47% during the first half of the year, and they are bracing themselves for a loss during the second half while passengers restrain their spending in the middle of the economic downturn. They reported that their profit fell to £170.4 as the cost of fuel had more than doubled during the first half until the end of September, even though their passenger number rose to 32 million, or up 19%.

They also admitted that they will cut their average air fare by 15% to 20% in order to help stimulate the demand for flights during the second half of the year. They said that the looming recession should continue driving oil prices and fares during the winter. They did add, however, that they are confident they will break even for this year.

Collins Stewart Research said to investors that the greatest concern are the comments that Ryanair has made on the outlook of winter yields. This is a clear indication that carrier yield management systems are having a hard time filling seats, they continued, and they are being made to discount heavily in order to stimulate the demand.

Michael O’Leary, the Chief Executive at Ryanair, said that the recession of the economy has caused the confidence of the consumer to collapse. However, he continued to be upbeat in saying that as Ryanair has one of the airline industry’s strongest balance sheets, having the lowest cost base and €2.1 billion in cash, they are in a strong position to take advantage over those opportunities that will arise from the economic recession and financial crisis during the coming year. He also added that if the price of oil is maintained at about $80 a barrel for 2009, their earnings will strongly rebound.

Learn more about Ryanair by visiting www.ryanair.com