Ryanair lifts passenger growth forecast as price war hits rivals

* Hikes 2024 passenger target 10 pct to 200 mln

* Says to take advantage of low fares to expand

* Says still expects FY profit growth of 7 pct

* Announces share buyback of 550 mln euros (Adds share price up 6 pct; non-fuel costs falling)

By Conor Humphries

DUBLIN, Nov 7 (Reuters) - Budget airline Ryanair raised its long-term passenger growth forecast by 10 percent on Monday to 200 million travellers a year by 2024, saying it planned to take advantage as intense fare competition forces higher-cost rivals to retrench.

It also announced it would return an additional 550 million euros to shareholders by February in a share buyback, a move that helped lift its share price by 6 percent.

Ryanair cut its profit forecast last month by 5 percent for the year to March due to sterling weakness and lower average fares, but it still expects to outperform most rivals by increasing profits by 7 percent in the year to the end of March.

With (Other OTC: WWTH - news) the lowest cost base in the industry and a strategy of filling planes irrespective of air fares, it says it is uniquely positioned to take advantage of current low fares to boost market share.

"We have EU incumbents retrenching, restructuring...creating more and more opportunities for Ryanair, particularly in primary airports," Chief Executive Michael O'Leary said in a video presentation.

"The second half of the year will be difficult in a weaker pricing environment, but we expect that with a huge cost advantage over every other carrier in Europe, Ryanair is well positioned to continue to grow strongly."

Ryanair said it plans to grow capacity by 13 percent this winter compared to an industry average increase of around 9 percent - the highest level of capacity growth in the industry in a decade.

Already Europe's largest carrier by passenger numbers, Ryanair said it hopes to lift its share of the European short-haul market from 15 percent to over 20 percent by 2024. It will defer the retirement of around 40 planes to boost capacity to 585 Boeing Co (NYSE: BA - news) 737 airliners by 2024.

Ryanair shares have outperformed many of their peers in recent months as the sector struggled to come to terms with Britain's vote to leave the European Union and a flood of capacity that has driven down prices.

Its share price of 13.42 euros at 0956 GMT was 2 percent below its level before Britain's vote to leave the European Union (KSE: 000910.KS - news) was announced, compared to a fall of around 20 percent in the European airline sector as a whole.

Profit after tax for the six months to the end of September was 1.17 billion euros ($1.30 billion), in line with analyst forecasts.

British Airways owner IAG stuck to its main long-term earnings and margin growth targets on Friday but scaled back its plans to expand capacity.

Budget rival easyJet warned in October that annual profit had fallen by more than a quarter and hinted that trading would remain tough.

While a sharp fall in fuel prices in the past two years has allowed airlines to cut prices, Ryanair managed to cut non-fuel per-passenger costs by 5 percent compared to last year, in part by cutting the number of empty seats on flights.

O'Leary said Ryanair was also benefiting from cheaper financing and lower plane costs thanks to its size.

While Ryanair built its business by striking low-cost deals with small airports far from city centres, by the end of this year it will for the first time be flying mainly to primary airports.

Last week it announced plans to fly from Lufthansa's home hub of Frankfurt.

The Airports Council International Europe trade body on Monday described Ryanair's move into Frankfurt as a "turning point for European air travel" as low-cost carriers increasingly compete with legacy rivals at the continent's largest airports. ($1 = 0.9034 euros) (Reporting by Conor Humphries; editing by Jason Neely and Adrian Croft)