Ryanair said it plans to cut fares by 7% this year as annual profits at the budget airline soared by almost half.
READ MORE: Glasgow Airport celebrates busiest April ever
The Dublin-based carrier said it expects to reduce fares as it bids to maintain market share across a European airline industry that has been hit by the terror attacks in Brussels and Paris.
The impact of the recent EgyptAir plane crash may further weaken the appetite for international travel over the coming months.
The cuts in fares come as Ryanair posted profits after tax up 43% to 1.24 billion euros (£959 million) in the year to March compared with a year ago, just short of City forecasts of £1.3 billion (£1 billion).
The airline said over the previous 12 months it cut average fares by 1% to 46.67 euros (£36.11), as it passed on fuel savings which has seen oil prices fall some 70% since the summer of 2014.
The carrier said passenger numbers lifted by 18% to 106.4 million over the period.
Ryanair chief executive Michael O'Leary said: "The full-year to 2016 was a year in which we delivered significant traffic and profit growth in all four quarters."
However, the carrier said sales in the fourth quarter of its year were hit by more than 500 flight cancellations caused by a combination of the Brussels attacks in March and a series of French air traffic control strikes.
It added that revenues in the first quarter of its new year will also be impacted by air traffic control strikes in Italy, Greece, Belgium and France.
The business said sales in this period would also be hit by lower fares and a weaker pound in the run-up to the UK's Brexit vote on June 23.
However, the airline said it "cautiously" forecasts net profits this year will rise by around 13% to between 1.38 billion euros (£1.07 billion) and 1.42 billion euros (£1.10 billion).
The airline reiterated its call for the UK to remain in the EU ahead of the vote next month, saying it is "actively campaigning" for a Remain vote to win.
It said: "If the UK leaves the EU then this, we believe, will damage economic growth and consumer confidence in the UK for the next two to three years as they begin to negotiate their exit from the EU and re-entry to the single market in very uncertain market conditions."
Analysts at Liberum said: "The results for the year to March were in line with consensus and our estimates. Compared with our forecasts, revenue was slightly light but costs marginally better than forecast."
Last month rival easyJet swung to a half-year loss after it said the recent terror attacks saw some passengers stay away and rivals stepped up the pace of competition.
READ MORE: EasyJet posts £24M loss as terror attacks deter passengers
The no-frills airline posted losses of £24 million for the six months to the end of March against profits of £7 million a year earlier, but said its bottom line was hit by a £33 million foreign exchange rate impact.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article