Ryanair has sacked two staff after flight crew permitted overcrowding on a flight from Girona in Spain to London's Stansted Airport last weekend.
A third staff member, the pilot of the plane, has resigned.
The dismissals came five days after off-duty Ryanair staff returning from a week's leave in Spain used the toilets at the rear of the aircraft for seating during the flight.
The incident, under investigation by the Irish Aviation Authority, is the first of its kind in Irish civil aviation.
Ryanair has been conducting an investigation since the matter came to light last Sunday. In a statement yesterday, a spokesman said: "This is the first such incident of staff travelling on an already full aircraft in the 20-year history of Ryanair."
It said the two off-duty cabin crew at the centre of the row knew the aircraft was full but still travelled "in breach of all Ryanair's boarding and operating procedures".
The airline said this had happened "with the knowledge and approval of the aircraft captain, who is a senior pilot of over 30 years' flying experience".
"As a result of the investigation, the captain has tendered his resignation from the airline with immediate effect," Ryanair said in its statement.
"The two cabin crew [who were both senior staff and therefore fully aware of our seating and boarding regulations\] have refused to resign and have been dismissed for gross misconduct."
It added that it was co-operating fully with the Irish Aviation Authority's inquiry into the affair. Ryanair has accepted from the outset that a problem occurred on the flight.
The aviation authority, which supervises Irish registered airlines, regardless of where in the world they are flying, became involved after a passenger reported the incident. Its inquiry should be completed within weeks. A spokeswoman for the authority said it had noted the action of the airline.
"Our investigation will continue," she said. "What will have to be decided at the end of the process is the nature of any sanction that we have to take."
She said the regulator knew the airline was "obviously taking this situation very seriously".
The authority, concerned primarily with issues of safety, cannot impose financial penalties in the event of wrongdoing.
Its sanctions range from a reprimand at the lower end up to the ultimate threat of prosecution.
It can also issue requirements for airlines to change training and operating regimes in the interest of safety. Sources said it was possible that the authority would accept Ryanair's disciplinary action as a sufficient response.
