The Irish airline, Ryanair, has announced annual profits registering gain of 13%. But the company said that recession across Europe will negatively affect the growth this year.

The budget carrier had recently attempted for the third time to buy rival Aer Lingus but the deal was blocked by the European Commission. It expects traffic growth for 2014 to be modest, having seen a rise of five percent in numbers of passengers in the year to 31st March.

Chief executive Michael O'Leary said, "With almost zero yield visibility into the second half and the EU-wide recession, we expect that there will continue to be downward pressure on yields which will dampen full year profit growth".

O'Leary said that traffic is likely to grow by another two million passengers to 81.5m in the current year. The summer's addition of more than 200 routes and seven new bases will help attract more number of passengers.

O'Leary added that the profits for 2014 are expected to increase between €570m and €600m. Ryanair Holdings Plc is the Europe's biggest discount airline. It boosted full-year profit to 13% as it added routes and planes to target short-haul markets in which full-service operators have been struggling to stem losses.

Chief Financial Officer Howard Millar said in a phone interview that there are tremendous opportunities right across Europe and there is a lot of retrenchment going on.