Low-cost airline Ryanair increased its profit forecast today, despite the impact of a rising fuel bill.

The Dublin-based carrier said full-year net profits were set to rise 17.5% to €470 million, higher than previous forecasts of €440 million. The guidance came as Ryanair posted a 23% rise in pre-tax profits for the six months to September 30, to €459.5 million.

Costs grew by 5% due to higher oil prices, increased airport charges at Stansted and rising staff overheads.

This was offset by a 20% rise in passenger numbers to 26.6 million and a 54% hike in ancillary revenues to €252 million. This includes onboard sales and excess baggage revenues, as well as improved penetration of car hire, hotels and travel insurance.

Ancillaries now account for just over 16% of total revenues as the company looks to meet a 20% target.

Further growth could come from in-flight mobile phone calls, which will be tested on 25 aircraft before the end of March. Stephen Furlong from stockbroker Davy said there us potential for further upgrades. In a weak market, shares were down 23 cents, or 4%, to €5.52.