Ryanair’s fares are expected to drop by 20% over the next six months, even though it means the airline will make a loss during that period.

Speaking at the release of its half-year results to September 30, 2009, chief executive Michael O’Leary said fares had already fallen 17% this financial year.

Despite this, the airline saw its net profit increase by 80% to €387 million for the period from a revenue of €1,767 million, largely thanks to a 42% reduction in fuel costs.

O’Leary predicted further fare cuts, adding: “We expect average fares to fall by up to 20% during quarters three and four, which will result in both these quarters making a loss.

“Despite this, our full-year guidance remains unchanged and will be substantially profitable, at a time when many of our competitors are losing money, consolidating or going bust.

“Recent weeks have seen the demise of SkyEurope and Seagle Air in Slovakia, and MyAir in Italy, and we expect further casualties this winter.

“Ryanair is the only major European airline to increase traffic and profits. We are winning substantial market share from the big three, high-fare, flag-carrier groups led by Air France, British Airways and Lufthansa and we expect this trend to continue.”

O’Leary’s confident predictions come despite his admission in the results that traffic figures through UK airports are expected to drop by 10% over the next six months.

He welcomed the recent announced sale of Gatwick by BAA and called on the airport operator to hasten its sale of both Stansted and one of its Scottish airports.

O’Leary also urged Boeing to offer the airline a price cut on the sale of 200 aircraft currently scheduled to be handed over from 2013 to 2016. He threatened to pull out of the deal unless his demands were met.