Ryanair has reported a 20% increase in half-year profits to €544m and said it was raising its full year net profit guidance.

The airline said its revenues for the six months to the end of September rose by 24% to €2.7 billion, while its passenger numbers rose by 12% to 44.7 million from 40.1 million.

Ryanair said that average fares increased by 13% and its units costs were also up 13% due to a 37% increase in fuel costs and longer routes.

It said that while its half-year yields were slightly better than forecast, its outlook remains ''cautious''.

''Based on current Q3 bookings and very limited visibility into Q4, we now expect H2 yields will rise by up to 14%, slightly better than the 12% previously guided. Accordingly we are raising our full-year net guidance by 10% from €400m to €440m, subject of course to the final outturn of Q4 yields,' commented Ryanair chief executive Michael O'Leary.

Mr O'Leary also said that the airline's capacity cuts will mean that traffic in the second half of the year will fall by 4%. Ryanair is expecting to report a traffic decline of 10% in November as it grounds 80 planes due to higher oil prices.

Shares in the airline closed up 5.1% at €3.52 in Dublin this evening.