Ryanair Q2 earnings down 31 pct

Irish airline Ryanair today posted a deeper-than-expected 30.9 percent fall in second-quarter profit but said it was confident of breaking even in the full year, dropping earlier warnings of a possible loss.

Europe's biggest low-cost airline said net profit for the three months to the end of September came in at 185.78 million euros ($237.3 billion). That compared with an average of 190.2 million euros expected by four analysts surveyed by Reuters.

"If oil prices remain at approx. $80 per barrel next year then our earnings will rebound strongly," Chief Executive Michael O'Leary said in a statement.

Ryanair plans to keep cutting fares aggressively to snatch business from rivals struggling in the economic downturn, with average fares in the second half expected to fall by between 15-20 percent, leading to losses in each of those two quarters.

"Our full year average fare could fall by almost 12 percent, although these lower fares will be largely offset by lower fuel costs (currently $73 per barrel in Q4)," O'Leary said.

The Dublin-based airline has taken a hedge for 25 percent of its fuel needs for the first half of the 2010 fiscal year at an average $77 per barrel, it said.