Budget airline Ryanair says forward bookings are strong and falls in average fares are moderating following a poor summer that saw profits and ticket prices plunge.

Europe’s largest airline by passenger numbers posted an 18% fall in after-tax profit for the six months to the end of September, with average fares down 10%.

However, fares in the current quarter would be only “modestly lower” than the same period last year, group chief executive Michael O’Leary said.

“Forward bookings are strong, demand is strong, and the (ticket) price declines appear to be continuing to moderate.”

Chief Financial Officer Neil Sorahan told Reuters that fare declines in the quarter ending in December would likely be below 5%.

Constrained market capacity and lower interest rates will hopefully lead to a more supportive environment for ticket prices next year, he added.

Ryanair posted after-tax profits for the half year of €1.79 billion, broadly in line with the €1.8 billion profit forecast in a company poll of analysts.

It is trimming its passenger growth target for its next financial year, which ends on 31 March 2026, to 210 million passengers from 215 million to reflect delivery delays from Boeing.

It declared an interim dividend of €0.223 per share.

The company said it carried 115.3 million passengers, an increase of 9% on the same time last year, while its load factor – how many seats it fills on each flight – stood at 95%. Average fares in the six month period slipped by 10% to €52 from €58.

Passenger numbers rose by 7% to 18.3 million in October from 17.1 million the same month last year.