RYANAIR’S SHARE price fell almost 9 per cent to €3.08 yesterday as the budget carrier’s cautious full-year guidance disappointed market expectations.

The airline also revealed yesterday that it had marked down its stake in Aer Lingus by €13.5 million during its first quarter.

Nonetheless, Ryanair’s net profit rose by 550 per cent year-on-year to €136.5 million in the three months to the end of June. The biggest driver of this was a 42 per cent fall in fuel costs.

An 11 per cent rise in passenger numbers was offset by a 13 per cent drop in average fares, with the result that revenue was flat at €745 million.

Ryanair’s deputy chief executive Michael Cawley told The Irish Times that the airline could potentially reduce its non-fuel operating costs by 5 per cent over the full year. This will be partly achieved through increased staff productivity.

“We’re going to recruit about 1,200 new employees this year to service the new aircraft that are coming into the fleet,” he said.

Even with this increase, the number of passengers per employee will actually rise because of the economies of scale that will be achieved as Ryanair launches more bases and routes.

However, none of these new jobs will be based here “because we’re not delivering growth in Ireland”, Mr Cawley said.

“Airport charges are in freefall everywhere except in Ireland and the deals we’re getting right now across Europe are a fraction of what we were getting last year,” he said. “That is helping a lot in terms of reducing costs.”

Chief executive Michael O’Leary said: “We now expect the traffic at the main Irish airports to fall by 20 per cent this winter as Irish tourism collapses under the weight of this €10 tourist tax.”

Ryanair has already reduced its Shannon and Dublin services, a decision it said was due to the impact of the tourist tax introduced by the Government.

“We will reduce them further and quite dramatically for the winter,” Mr Cawley said, adding that details of such cuts will be announced within the next 10 days.

Overall, the airline foresees a 15 per cent rise in traffic for the year, which equates to an extra nine million passengers. This will be achieved by lowering fares further and growing the number of locations to which it flies.

“We see a huge migration of passengers from the higher-cost airlines to Ryanair and we expect that trend to continue,” Mr Cawley said.

The airline stressed that it has “limited visibility” beyond the next two months, but it anticipates that passengers will remain very price sensitive and predicted that yields will weaken over the full year.

“We expect the full-year yield decline will be at or slightly more than minus 20 per cent,” Mr O’Leary said.

As a result, the company’s net profit for the year is expected to be towards the lower end of the previously guided €200-€300 million range.

In September, Ryanair will open its 33rd European base at Porto in Northern Portugal. In Norway, it will open a number of new routes to and from Oslo.