Ryanair, the largest low cost carrier in Europe, reported a 47% slump in its half year interim profits for 2008 to €215m from €407.6m last year.
During the six months, the Irish carrier said its fuel bill rose to €788.5m, more than double the €392.7m figure for the same period in 2007.
Ryanair said traffic grew during the period by 19% to 31.6m passengers while average fares fell by 4% to €47.
Revenue was also up by 16% to €1.8bn.
Michael O'Leary, Ryanair's ceo, said the performance in "very difficult trading conditions" was "testimony to the strength of the Ryanair low cost model."
He said that despite grounding 19 aircraft at Stansted and Dublin, he expected traffic to grow by 9% in the winter and by 14% to 58m passengers for 2009.
Mr O'Leary said the outlook for the remainder of 2008 was dependent on fuel prices. The airline had hedged 80% of its oil needs for the third quarter but nothing for the fourth quarter.
He added: "The recession will continue to drive down oil prices and fares this winter. We will continue to respond with lower fares and aggressive price promotions to keep Europe flying and to maintain our market leading load factors.
"Although we have limited visibility, we now believe that average fares in the second half will fall by between 15% to 20% leading to losses in the 3rd and 4th quarters.
"Our full year average fare could fall by almost 12%.....As a result our previous guidance remains unchanged and we remain confident that we will break even for the full year.
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