Ryanair has shaken off the disruption caused by foot-and-mouth disease, recession and the September 11th bombings to produce a set of first-half results well ahead of the most optimistic forecasts.

With after-tax profits up 39 per cent in the first half to €88 million (£69.3 million), the company says it is comfortable with consensus full-year after-tax profits forecasts of €130 million - or €2.5 million a day.

The reaction in the market was immediate, with heavy demand for the shares driving Ryanair up 13 per cent as analysts set a €14.00 12-month price target for them. In Dublin, Ryanair soared €1.32 to €11.52, its highest level since early August. In New York, there was very heavy trading in the Nasdaq-listed ADRs and by midday the shares were up more than 10 per cent at more than $52.

The bumper half-year results were driven by a 37 per cent increase in passenger numbers to 5.3 million, and Ryanair commercial director Mr Michael Cawley said the airline was happy with analysts' estimate of passengers for the full year - from 9.2 million to 9.5 million passengers. The passenger load factor in the half-year rose from 80 per cent to 84 per cent and total revenues were 29 per cent higher on €344.2 million.

The rise in revenue was coupled with significantly lower growth in costs than analysts had expected. Goodbody analyst Mr James Forbes cited the €23 million rise in airport charges against a forecast of €28 million, and the €27.9 million rise in fuel charges against the forecasted rise of €32.6 million.

Mr Cawley said that while Ryanair expected the yield per passenger to fall by 7-8 per cent as a result of lower fares over the remainder of the year, this fall in yield would be more than compensated for by the growth in passenger numbers and more intense cost-cutting. He said the group was in negotiations with airports, its maintenance contractors FLS and Lufthansa and other contractors about lower charges and added that fuel, airport and handling charges would fall. Mr Cawley said Ryanair had been "inundated" with offers of second-hand aircraft and added "aircraft costs will plummet".

Ryanair had net cash of €780 million at the end of the first half, some of which will be spent on acquiring aircraft. "We are buying when everybody is selling aircraft and we have cash when nobody else has cash," he stated.