LONDON (Dow Jones)--Ryanair Holdings PLC (RYAAY) Chief Executive Michael O`Leary said Wednesday that average fares for the first half of its current financial year rose by about 3% to 4% compared with the same period a year ago.

The Irish budget airline is still on course to carry over 35 million passengers in the current financial year which ends March 31, 2006, he said.

O`Leary said in September he expected the airline to move between 35 million and 35.5 million passengers in the year. Speaking at a news conference in London Wednesday, he said the recent strike by Boeing Co. (BA) machinists had cost Ryanair about 300,000-400,000 passengers over the period.

The airline had to make minor modifications to its flights schedule during September and October, due to delays in the delivery of seven new Boeing 737-800 aircraft.

Turning to Ryanair`s ancillary revenue - any income not derived from tickets - O`Leary said the airline aims to launch a new in-flight entertainment system next summer. Sometime after this, possibly in 2007, it also aims to make in- flight gambling possible on its aircraft, he added.

In-flight gambling could potentially generate EUR50 million in annual sales within a few years, O`Leary said.

Ryanair is looking to launch a gambling product on its Web site in the next couple of months, O`Leary added. The airline is also aiming to install base stations on its planes so that passengers can use wireless devices.

Ryanair will release second-quarter results Monday.