Ryanair’s Ricardo Morais Correia (left), head of communications Robin Kiely and Stephanie Pattison launching the Ryanair Getaway Café on-board menu.

Ryanair said customer service was improving “rapidly” as the budget airline looks to recover from its first drop in annual profits in five years.

Post-tax profits were eight per cent lower at €523 million in the year to March 31, after a price war left average fares four per cent lower at a time of rising fuel costs.

Chief executive Michael O’Leary described the performance as disappointing but said efforts since September to reinvent Ryanair’s image and reputation helped passenger traffic rise four per cent in the second half of the year.

It has also seen better booking trends and fuller planes in the current year.

Earlier last week, it launched a new Getaway Café on-board menu, including a hot breakfast option.

Other changes have included the relaxation of bag restrictions for passengers, a reduction in baggage charges and an easing of booking conditions.

The airline, which operates more than 1,600 routes from 68 bases, has also moved to fully allocated seating on all flights, meaning that passengers who do not pay €5 to select their seats will be allocated them during the 24 hours before the date of departure.

The company expects to fly 84.6 million passengers in the year to March 31 – a four per cent rise on a year earlier – although it remains “very cautious” about booking trends for the winter period.

Overall, the airline is predicting a recovery in profits for the current year to between €580 million and €620 million. Over the next five years, it plans to grow to more than 110 million customers a year.

Ryanair made revenues of €1.25 billion from ‘extras’ such as reserved seating and higher administration and credit card fees.

This was a rise of 17 per cent on a year earlier and accounted for 25 per cent of all sales in the year.

Fuel and oil costs increased by seven per cent to €2 billion, due to higher euro fuel prices and increased flying time.

Staff costs rose by six per cent to €463.6 million, partly after a two per cent pay increase granted in April 2013.

The airline also rolled out a new website last November, cutting the number of clicks involved in the booking process from 17 to five.