Ryanair said an eight per cent rise in average fares helped it beat expectations in the third quarter.

The firm said yields were boosted by stronger pre-Christmas bookings, while lower than expected operating costs meant profits were better than forecast.

However the airline said fourth quarter passenger numbers were expected to be around 3% fewer than the previous year.

This was due to it grounding up to 80 aircraft to limit the impact of high oil prices, airport fees at Stansted and Dublin, and weaker demand, it said.

Despite this, the airline now expect full year profits to exceed previous guidance of €490m to €520m.

It expects that number to rise close to €540m, a 7.0% increase on last year's profits.

The firm reported profits of €18m over the period, 21% on the three months to the end of Dcember 2011, while revenues rose 15% to €969m.

The airline flew 17.3m passengers, up 3.0% per cent on the previous year, who paid, on average, 8.0% more for their tickets.

Unit costs rose 11% mainly due to a 24% (€81m) increase in fuel. Stripping out fuel, costs rose by 4%.

"Our tight cost management, at a time when competitor costs are rising faster, will enable Ryanair to expand our price and cost leadership over all other EU airlines for the foreseeable future," said Chief Executive Michael O'Leary.

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