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Budget airline Ryanair will suffer a 25 million euro (£22 million) blow in the wake of its flight cancellation fiasco, but has still bolstered half-year profits by 11%.

The Irish firm said costs in its “sales, marketing and other” bracket had leapt 30%, as it dishes out compensation after around 700,000 customers were disrupted by cancelled flights stretching from September to March next year.

The low-cost carrier has come under fire after cancelling around 20,000 flights in the autumn due to an error over pilot holiday rosters.

Pre-tax profits climbed to 1.293 billion euro (£1.139 billion) for the six months ending in September, up from 1.168 billion euro (£1.029 billion) over the period last year.

The jump was driven by a strong Easter period, helping bolster customer numbers by 11% to 72.1 million.

Revenues also picked up 7% to 4.425 billion euro (£3.899 billion), as it added 80 new routes and drove down air fares by 5%.

However, moves to boost pilot pay could impact its full year performance by as much as 100 million euro (£88 million), the company said.

Chief executive Michael O’Leary said: “These strong H1 results reinforce the robust nature of Ryanair’s low fare, pan-European growth model, even during a period which suffered a material failure in our pilot rostering function in early September.

“Prior to this event, we were on track to deliver strong H1 results during which we opened three new bases and 80 new routes.

“We took delivery of 35 new B737s in the first six months of 2017, we stimulated 11% traffic growth with 5% lower airfares, and achieved an industry record load factor of 97% in the peak summer months.”

The Dublin-based firm stuck by its annual profit guidance, saying it saw no reason to adjust the measure from between 1.40 billion euro (£1.23 billion) and 1.45 billion euro (£1.28 billion), despite pilot rostering problems bumping up costs.

However, it said full-year traffic was now expected to slow from 131 million customers to 129 million after having to ground 25 aircraft.

Shares rose more than 4% in response to the half-year performance.

Neil Wilson, ETX Capital’s senior market analyst, said: “More passengers, lower fares and on course for another record profit – investors might be wondering what all the fuss was about in the wake of September’s cancellation fiasco.

“But beneath the rising revenues and passengers there are concerns about rising labour costs that will affect Ryanair’s unit cost advantage over peers.”

It added: “There remains a worrying risk of a serious disruption to UK-EU flights in April 2019 unless a timely UK-EU bilateral is agreed in advance of September 2018.

“We, like other airlines, need clarity on this issue before we publish our summer 2019 schedules in mid-2018 and time is running short for the UK to develop a bilateral solution.”

The financial update comes during a choppy period for the airline industry, with a string of European airlines – Monarch Airlines, Air Berlin and Alitalia – collapsing into bankruptcy.

Ryanair said it was poised to capitalise on the pressures facing the wider industry by growing its presence in Germany and Italy and adding more aircraft to “take up any slack” created by the demise of Monarch.

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