Ryanair said its after tax profits were down 47 per cent at €215 million for the first half of the year as its fuel costs more than doubled.
The airline said its fuel bill rose to €788.5 million from €392.7 million while passenger traffic increased 19 per cent to 32 million in the six months to the end of September.
Despite this the airline remains "confident" of breaking even this year, Chief Executive Officer Michael O'Leary said in the statement. "Next year I think profits will rebound strongly."
"Fuel prices have been much higher, and our profits have been lower," Mr O'Leary said in a Bloomberg Television interview.
The average price of jet fuel in northern Europe was 65 per cent higher than a year earlier during the quarter, though has declined since then.
Over the period average fares including charges were 4 per cent lower at €47. Revenues were 16 per cent higher at €1.8 billion.
Net income for the three months ended September 30th dropped to €185.8 million ($239.5 million) from €268.9 million a year earlier. Analysts had predicted profit of €182 million.
Mr O'Leary said: "If oil prices remain at approximately $80 a barrel next year then our earnings will rebound strongly. We have a significant cost advantage over our competitors, many of whom have hedged fuel next year at significantly higher levels than current market prices.
"This will force competitors to further increase airfares and widen the price gap between them and Ryanair's lowest fares."
Ryanair's stock has fallen 41 per cent this year, cutting the airline's market value to €4.05 billion, as surging oil prices, followed by contracting economic growth, caused havoc in the industry.
At least 30 airlines worldwide have collapsed this year, and carriers' losses are likely to exceed $5.2 billion, according to International Air Transport Association forecasts.
Ryanair is refraining from hedging contracts that would fix the price that it pays for fuel for its fourth quarter, Chief Financial Officer Howard Millar said today in an interview. The airline is 80 per cent hedged at $124 per barrel for the third quarter.
For the first half of the next fiscal year, Ryanair has hedged 25 per cent of its fuel needs at an average $77 a barrel of crude oil, the company said in the statement.
The carrier is also paring costs by grounding flights at its London Stansted and Dublin airport bases. As part of the initiative, as many as 400 pilots and flight attendants will be asked to take one week's unpaid leave this month.
Bloomberg