Ryanair has responded to a drop in the numbers of seats it fills by offering 10 million flights over the next six months from as little as €10 and £10 (€14), including taxes and certain other charges.
"We have noticed that the market is softening and this is our response," said Howard Millar, Ryanair's deputy chief executive. "This is a precursor for an extensive price war over the summer months."
About two million of the seats are expected to be made available on flights in and out of Ireland, Ryanair said.
Some 3.5 million of the flights will be available from €10/£10. The same number will cost €15/£15, with three million available at €20/£20.
These fares include taxes and other charges, but optional charges for priority boarding and online check-in of baggage will continue to be charged separately.
Analysts said that the move would directly affect Aer Lingus, British Airways, Lufthansa, EasyJet and Air Berlin.
Ryanair's load factor - the number of seats it fills on each aircraft - declined to 83 per cent in April from 85 per cent in the same month of 2006.
Aer Lingus, BA and EasyJet have also recently reported declining business.
Ryanair has also made a small concession to consumers by saying that promotional fares advertised on its website will now include taxes and charges.
Previously, taxes and other levies were added to a fare only after it was quoted.
The advertised fare will not include charges for priority boarding, credit card fees or the online check-in of bags.
Ryanair said that the change to its web price advertisements was in line with its competitors and would aid transparency in its pricing.
However, such fares are often difficult to find.
When passengers input their intended travel dates, the website displays a list of fares on the route. It is not immediately clear from this list which flights are available at the special fares as the taxes and charges are not included at this stage.
This only becomes clear at a later stage in the booking process.
This move relates only to its website. Ryanair is already required to publish fares including taxes in print advertising in Ireland, Britain and most other European markets.
"There's a general move in the industry towards inclusive pricing," said Mr Millar.
Ryanair said that passengers who found a cheaper fare with a rival on flights to the same destination would be refunded double the difference if they booked with Ryanair.
The claim must be lodged within one hour of the booking with Ryanair and include a screen copy of the rival's lower fare in an e-mail. In all, 12 terms and conditions are attached to this offer.
Dermot Jewell, chief executive of the Consumers' Association of Ireland, said that the move to refund money was to be welcomed. "This will certainly bring competition in the industry to life."
