RYANAIR CHIEF executive Michael O’Leary yesterday said the airline would post a loss of about €150 million in the second half of the current financial year as it continues to lower its fares to stimulate consumer demand.

Mr O’Leary made his comments in an interview with Bloomberg Television, adding that average fares would decline this winter by 20 per cent.

In spite of this, Ryanair will be profitable for the year as a whole. The airline yesterday guided that its net profit would be at the “lower end” of the €200-€300 million range for the 12 months to the end of March 2010.

Ryanair yesterday announced a net profit of €387 million for the six months to the end of September. This was 80 per cent higher than the previous year following a decline in fuel costs.

Speaking at a press briefing in Dublin yesterday, Ryanair deputy chief executive Michael Cawley estimated that the Irish airline would save about €500 million on fuel costs for the year as a whole.

The airline recently hedged 50 per cent of its fuel requirement for fiscal 2011.

Ryanair’s revenues for the first six months declined by 2 per cent, largely as a result of average fares being reduced by 17 per cent to €39 a head. Ryanair carried 36.4 million passengers during the six months, a year-on-year rise of 15 per cent. The airline expects to carry about 66 million people for the year as a whole.

Its load factor in the first half of the year was static at 85 per cent.

On the negative side, Ryanair’s ancillary revenue per passenger, which includes car hire, hotels and baggage fees, declined by 15 per cent to €49. Mr Cawley said this was due to passengers reducing the amount of luggage they check in.

Ryanair’s results were below analyst expectations and its share price closed down 2 per cent in Dublin yesterday at €2.84. At one point the shares were down more than 9 per cent but they recovered during afternoon trading.

Mr O’Leary also sounded a downbeat note on talks with Boeing for an order of 200 aircraft for delivery between 2013 and 2016 to sustain Ryanair’s growth.

In a statement, Mr O’Leary said “little progress” had been made in talks with Boeing. It would end its relationship with Boeing if discussions were “not completed before the year end”.

Mr O’Leary said that, in the absence of an agreement with Boeing, Ryanair would “change course” and slow its growth post-2012 – at which point it expects to be carrying 90 million passengers – and distribute cash to shareholders.

“We’re not some kind of a growth bunny and ... if it doesn’t make sense for our share price and our shareholders to grow, then we’ll stop growing and run the business for cash,” Mr O’Leary told Bloomberg.

Ryanair now has 202 Boeing aircraft in its fleet. This is due to rise to about 310 by 2012 as a result of an order placed in 2005. Mr Cawley said Ryanair might cancel 15 of these new aircraft over the next 12 months if a deal with Boeing was not agreed.

Commenting on its plans for Ireland, which accounts for 9 per cent of traffic, Mr Cawley said Ryanair would press ahead with plans to reduce its base in Shannon from four planes to one by next May if a new deal on airport charges was not reached. “Shannon continues to refuse to accept our offer of 1.2 million passengers a year for the next five years,” he said.

Ryanair has also reduced its aircraft numbers at Dublin Airport from 22 to 15 this winter. “We are not sure what will happen [there] next summer,” he said.

He described Ireland’s €10 air departure tax as “stupid”.