Ryanair narrowed its loss to €11 million in the third quarter of the year as costs fell and passenger numbers increased.
In comparison, the no-frills airline posted a loss of almost €102 million in the three-month period to December 31st, 2008.
The company said revenues rose 1 per cent to €612 million as the average fare fell 12 per cent. However, a change in consumer behaviour saw ancillary revenues fall behind that of passenger growth, rising only 6 per cent.
Traffic carried by the airline rose 14 per cent in period ending December 21st, 2009, with the airline carrying 16 million passengers compared to the same quarter in 2008. Yields were down 12 per cent better than anticipated as the company cut capacity on some routes and ad dded new bases. Previous guidance predicted yields would fall 20 per cent.
"I'd say Ryanair has turned the corner in demand terms, especially in continental Europe, from what was a very low period at the start of 2009," deputy chief executive Michael Cawley told reporters in London.
Unit costs fell by 23 per cent, with the decline in oil prices making the largest contribution to the fall, declining 37 per cent.
Chief executive Michael O'Leary said the results were disappointing, but better than expected.
"Market conditions remain difficult, although the increasing pace of consolidation and closures among our competitors allied to Ryanair’s continuing fleet expansion will lead to further market share gains this year in particular in Italy, Scandinavia, Spain, and the UK," he said.
The company forecast yields for the year to decline close to 15 per cent, rather than previous predictions of 20 per cent. Profit guidance was increased to €275 million, up from the lower end of the range of €200 million to €300 million previously guided.
"Generally we're quite positive on recession," Ryanair chief financial officer Howard Millar said. "At this point there is really no sign (of an) end yet."
It also said fares were declining less than anticipated after it cut loss-making winter capacity and replaced it with more promising new routes, with some of the best growth prospects in France, Germany and Spain.
Ryanair said in January fares would stay flat on average during the current calendar year. However, Mr Millar said to meet its long-term profit growth targets, the firm would have to raise fares "somewhere down the line".
Ryanair recently announced it would reduce capacity at Dublin Airport cutting the number of aircraft based in Dublin from 18 to 15 during its summer schedule, which begins on March 28th.
The company said 150 jobs would be lost at the airline, and 2,000 support jobs would go as a result.
The reduction in capacity will reduce the airline's traffic at Dublin Airport from 8.7 million passengers to 6.5 million in the year to March 2011.
The company intends to base only one aircraft in Shannon this year, compared with four in 2009.
Mr O'Leary has blamed high airport charges and the Government's €10 travel tax for the move.
Ryanair has also reduced capacity at Stansted and announced plans last year to move several routes from Manchester Airport to other locations in the British midlands.
Additional reporting - Reuters
