19/05/2014 06:21 BST | Updated 19/05/2014 06:59 BST

Ryanair Suffers First Profits Fall In Five Years

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The chief executive officer of Irish low-cost airline Ryanair, Michael O'Leary, gives a press conference on November 27, 2013 in Brussels to announce his company will establish a second base in Belgium at Zaventem airport, running 10 daily flights from there as of February 2014. AFP PHOTO / BELGA / JORGE DIRCKX - BELGIUM OUT - (Photo credit should read JORGE DIRCKX/AFP/Getty Images)

Ryanair said customer service was improving "rapidly" as the budget airline looks to recover from its first drop in annual profits in five years.

Post-tax profits were 8% lower at 523 million euro (£426.5 million) in the year to March 31 after a price war left average fares 4% lower at a time of rising fuel costs.

Chief executive Michael O'Leary described the performance as disappointing but said efforts since September to reinvent Ryanair's image and reputation helped passenger traffic rise 4% in the second half of the year. It has also seen better booking trends and fuller planes in the current year.

Changes have included the relaxation of bag restrictions for passengers, a reduction in baggage charges and an easing of booking conditions.

The airline, which operates more than 1,600 routes from 68 bases, has also moved to fully allocated seating on all flights, meaning that passengers who do not pay five euro (£4.10) to select their seats will be allocated them during the 24 hours prior to the date of departure.

The company expects to fly 84.6 million passengers in the year to March 31 - a 4% rise on a year earlier - although it remains "very cautious" about booking trends for the winter period.

Overall, the airline is predicting a recovery in profits for the current year to between 580 million euro (£473 million) and 620 million euro (£505.6 million). Over the next five years, the airline plans to grow to more than 110 million customers a year.

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