BUDGET airline Ryanair last night warned that high oil prices and strong competition could speed up its prediction of a "bloodbath" in the airline industry.

As the airline, which operates flights from Durham Tees Valley airport, announced record half-year profits, it said it remained cautious about the rest of the year.

The Dublin-based carrier said profits after tax in the half-year to September 30 climbed 15 per cent while passenger numbers rose 24 per cent to 14 million.

Ryanair said its low fares strategy had remained robust in a very difficult economic climate marked by record fuel prices and intense price competition.

It said the results represented its 30th consecutive quarter of profitability.

However, the airline said high fuel costs would affect its future profits guidance.

If the price of a barrel of Brent crude stays at $50 dollars for the rest of this year, the group said it would incur extra costs of about £38.2m.

Chief executive Michael O'Leary said the group remained cautious in its outlook for the remainder of the tax year, but that the airline expected to achieve significant increases in passenger volume growth.

''With the lowest cost base, we believe Ryanair will continue to grow profitably,'' he said. The company said it was continuing its ''disciplined route growth'', with its two new bases at Barcelona and Rome exceeding expectations, as had the group's 41 other routes launched this summer.

Its expansion would continue this winter, with Rome and Milan each getting two more jets and Frankfurt, Stockholm and Glasgow getting one extra aircraft each