Shares in Ryanair rose yesterday after the budget airline said the number of passengers it carried in July surged 41 per cent over the same month last year.

The carrier's stock closed on the Dublin stock exchange yesterday at €6.10, 20 cents or 3.39 per cent higher an the pre-weekend close.

The company, which reports results for the January-March period this morning, revealed stronger seat sale figures as British Airways said it continued to suffer last month from poor demand for air travel.

Ryanair said it carried 1.46 million passengers in the month, up from 1.03 million a year ago.

The company attributed the increase to aggressive fare-cutting, route expansion and higher Internet sales.

Analysts expect strong first- quarter results.

In a note issued ahead of the weekend, Goodbody analyst Mr James Forbes forecast revenues to increase by a quarter to €188 million and said operating profits were likely to rise by 28 per cent to €36.9 million.

He wrote: "While passenger number rose by 38 per cent to 3.54 million in the quarter, we expect average fares to have remained broadly unchanged on the fourth quarter [last year] (€47) due in part to special offers to promote the new Hahn routes.

"Ancillary revenue growth is expected to match passenger volume growth in this period."

In a statement yesterday British Airways said it had incurred another big fall in passengers last month, adding that there was no sign of an improvement soon.

"The overall market outlook continues to be soft," said the airline, which is Europe's biggest. The company said it had carried just over 3.5 million passengers in July, down 10 per cent on the same month last year.

The company has already warned investors that it expected revenues to fall this year, rather than be unchanged as previously expected.