Low cost airline Ryanair has announced a fall in profits for the first time in five years after being hit by a price war.

Net profit at the company was down to €523 million for the year to March, from €529 last year. In the past 12 months it has issued two profit warnings due to intense competition from rivals. 

However, in the coming year Ryanair says it will increase passenger numbers by four per cent, to more than 84.6 million people.

Ryanair chief executive Michael O'Leary said : "We have worked hard over the last six months to improve customer experience and enhance our industry leading service."

Improvements have also been made to the firm's digital strategy, which has been simplified and streamlined.

The company says forward bookings for summer 2014 are significantly ahead of last year, while the four new bases it has opened in Athens, Brussels, Lisbon and Rome are performing better than expected.