The warning came as the budget airline reported that net profit dropped 27% to 35m euros ($52m; £26m) during the October to December quarter.The drop was its first quarterly decline in a more than a year."The European airline sector is presently facing one of these cyclical downturns, with the possibility of a 'perfect storm' of higher oil prices, poor consumer demand, weaker sterling and higher costs.""The whole system got very frothy over the last couple of years and we can't keep bailing ourselves out with these artificial interest rate cuts," "We need to tighten the belt and focus on reducing costs."The two firms have fought to increase market share by slashing air fares, but aim to boost earnings by expanding their routes, adding planes and charging for any service above the basic cost of the flight, including baggage check-in.But he warned that if oil prices remained above $85 a barrel, and if consumer sentiment and the UK pound stayed weak, then the airline's earnings for 2008 could fall by up to 50% to 235m euros.The gloomy outlook is likely to weigh on Ryanair's share price, which has already slipped 18% this year."There is no visibility, it's just guesswork what they are doing at this stage."
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