Ryanair, the Irish budget airline, said today that it was ready to tear up its growth strategy and return more cash to shareholders if it fails to agree a deal to buy new planes from Boeing before the end of the year.

Michael O'Leary, the chief executive of Ryanair, said that he had made "little progress in our discussions with Boeing for 200 new aircraft for delivery between 2012 and 2016”.

He said: “We won't continue these discussions indefinitely and have signalled to Boeing that if they are not completed before the year end, then Ryanair will end its relationship with Boeing and confirm a series of order deferrals and cancellations."

Mr O'Leary added: "We would prefer to grow, but if Boeing doesn't share our vision, then I believe that Ryanair should change course before the end of this fiscal year and manage the airline over the next three years to maximise cash for distribution to shareholders."

The strategy represents a big U-turn and may deter investors who had bought shares for growth, but it is similar to that adopted by easyJet, which has indicated that it will slow its purchases of new aircraft in the current recession. Ryanair's London-listed shares fell 11 cents, or 3.7 per cent, to €2.835.

Mr O’Leary outlined his intentions as he announced a rise in post-tax net profit of 80 per cent, to €387 million (£348 million), in the six months to September 30.

Growing passenger numbers and a 42 per cent fall in fuel costs helped to offset a 17 per cent decline in average fares.

Mr O’Leary expects average fares to fall further during the remaining six months of the year, causing losses in the second half, but said Ryanair would remain profitable over the year as a whole.

He said: "We expect average fares to decline by up to 20 per cent during quarters three and four, which will result in both these quarters being loss-making.

“Despite this, our full-year guidance remains unchanged and will be substantially profitable, at a time when many of our competitors are losing money, consolidating or going bust."

Ryanair is expected to report profits at the lower end of a range of €200 million to €300 million.

Ryanair's profitable figures will contrast with those of British Airways later this week, forecast to unveil record losses of £250 million amid ongoing disputes with staff over changes to working conditions.

Cabin crew unions are threatening to ballot for a strike and are due to meet at Sandown racecourse today to discuss the ballot process.

They are also due in court later this week to seek an injunction preventing BA from imposing contract changes from November 16.

Ground crew facing similar changes are still in talks with management.

Mr O’Leary said that he is winning market share from BA and predicted that more carriers would fail this winter, after the demise of SkyEurope and Seagle Air in Slovakia and MyAir in Italy.

He said: "Ryanair is the only major European airline to grow traffic and profits strongly. We are winning substantial market share from the big three high-fare flag-carrier groups led by Air France, BA and Lufthansa and we expect this trend to continue."

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