Ryanair Holdings PLC announced its first decline in annual profit in five years today and warned of weak fares in the coming winter as the delivery of new planes gives it more seats to sell.

But strong summer bookings and higher charges for extras like carry-on baggage and on-board refreshments will lift profit by between 10 and 20 percent in the year to March 2015, Europe's largest airline by passenger numbers said.

The low-cost pioneer's profit was slightly ahead of that guide in its two profit warnings issued last year, which cited heavy discounting among European short-haul carriers and currency fluctuations for weaker performance.

"Given what we experienced last winter, when fares went down for reasons nobody can quite explain yet... we are very cautious in guiding for this winter," Chief Financial Officer Howard Millar said.

Net profit for the 12 months to March was 523 million euros (426.08 million pounds), just ahead of a consensus forecast of 515 million euros in a poll of more than 20 analysts, but well behind the record 569 million euros posted last year.

Profit should bounce back to between 580 million euros and 620 million euros next year, the company said, behind a consensus forecast of 634 million euros.

The forecast is "heavily qualified by H2 yield outturn, over which we currently have zero visibility," the statement said.

Millar said the industry appeared to becoming increasingly seasonal with the airline planning for a 6 percent increase in average fares in the six months to September before a fall of 6-8 percent in the following six months.

Ryanair cited intense price competition among European airlines as a key reason for profit warnings, but rivals said lower ticket prices were the result of cuts to compete with rivals who offered travellers a less hair-shirt experience.

Since the first profit warning, Chief Executive Michael O'Leary has announced sharp cuts to fees for excess baggage and reprinting boarding cards and introduced assigned seating on all planes to end the often frenzied boarding scramble.

Ryanair said it expects to consolidate its position as Europe's largest carrier by passenger numbers with an increase of 4 percent to 84.6 million passengers in the year to March 2015.

The company's shares closed on Friday at 6.35 euros, 19 percent below their all-time high hit last year before profit warnings in September and November, the first reported by the airline in a decade.