The budget airline said falling oil prices and its desire to keep its planes flying with fewer empty seats would drive fares lower.

Ryanair said half-year profits fell by 47% to £170.4m in the six months to September 30 – a period when fuel costs doubled.

The company said it still expected to break even over the full year as lower fares would be largely offset by the recent decline in fuel costs.

It said: “The recession will continue to drive down oil prices and fares this winter.

“We will continue to respond with lower fares and aggressive price promotions to keep Europe flying and to maintain our market leading load factors.”

The carrier, led by chief executive Michael O’Leary, said average fares in the second half would fall by 15% to 20% – leading to losses in the third and fourth quarters of the year.

Ryanair said passenger numbers grew by 19% to 31.6m in the half-year, with revenues ahead by 16% £1.23bn.

The company said it expected traffic numbers to grow by 9% this winter, despite grounding 15 Stansted aircraft and four Dublin-based aircraft because of “unjustified” increases in passenger charges.

While spot fuel prices have fallen to 60 dollars a barrel, Ryanair said it was 80% hedged for the current quarter at 124 dollars, but “unhedged” in the fourth quarter.

Mr O’Leary said: “If oil prices remain at about 80 dollars a barrel next year, then our earnings will rebound strongly.

“We have a significant cost advantage over our competitors, many of whom have hedged fuel next year at significantly higher levels than current market prices.

“This will force competitors to further increase air fares and widen the price gap between them and Ryanair’s lowest fares.”