Ryanair is to cut fares by up to a fifth to encourage more people to fly.

Europe’s biggest low fares airline Ryanair has reported a massive 47% slump in half-year profits, and has vowed to slash fares by up to a fifth to keep passengers flying during the recession.

Despite recording a 19% increase in passenger figures, profits totalled €215 million compared with €407 in 2007, the airline said.

Ryanair attributes the decline to a huge increase in the price of fuel – its fuel prices more than doubled to €788.5m during the period.

To encourage people to travel, it is planning to cut fares by 15-20% in the second half of the year, bringing the average annual price drop to 12%.

It is also reported to be planning the launch of transatlantic flights for just £8 by snapping up cut-price planes from struggling rivals.

According to press reports, Ryanair will operate between Stansted and Dublin airports to New York, Florida, Los Angeles, San Francisco and Boston. If given the go-ahead, the routes will begin at the end of 2009.

Ryanair’s CEO, Michael O’Leary, is confident the airline can rebound and said he is holding his forecast that it can break even in the financial year to March 2009.

He said: “The economic recession has caused consumer confidence to collapse. Ryanair’s fares are now even more attractive as consumers become more price sensitive and trade down from high fare, fuel-surcharging airlines, like Air France, BA and Lufthansa.

“As more airlines go bust, and the wave of European consolidation continues, the strongest survivors will be those airlines – like Ryanair – who are well financed, have a strong balance sheet, and the lowest cost base.”

From today (4 November), travellers can snap up seats for just €10/£10 inclusive on every one of its 250 routes for travel in late November, early December 2008 and January 2009. The special fares are available for one week only at: www.ryanair.com

By Natasha Piscitelli