Ryanair, Europe’s largest low-cost airline, is prepared for a fare war to break out later this year and will cut its own fares sharply to increase its market share to sustain profits, it said yesterday.

The Irish airline, Europe’s largest by passenger numbers, also reported a 43 per cent increase in net profits to €1.24 billion in the year ended March 31, in line with analysts’ forecasts.

The cuts in fares, which will be focused on the winter season, will heap further pressure on rivals who have already warned about the impact of increasing competition on fares and have trimmed some plans for increases in capacity as a result.

Ryanair’s fares are expected to fall by an average of seven per cent over the year and by between 10 per cent and 12 per cent in the winter months compared with a year ago, chief executive Michael O’Leary said.

“If there is a fare war in Europe, then Ryanair will be the winner,” he said in a video presentation following publication of its results. Any revision to the forecast for average fares was more likely to be down than up, he added.

The lower fares will enable Ryanair to boost its passenger numbers by nine per cent to 116 million passengers, increasing its leadership of European aviation in terms of traffic.

Rivals including British Airways owner IAG, Lufthansa and Air France-KLM have warned recently about the impact of increasing competition on fares.

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