When Ryanair boss Michael O'Leary promised on Tuesday to pump a million seats a month into a weak winter market and slash fares by 15 percent, he was ramping up pressure on rivals -- and on investors struggling to see an end to Europe's price wars.
Since Britain voted in June to leave the European Union, the environment for the continent's airlines has been rapidly deteriorating, wiping a quarter off the sector's market capitalisation and triggering a string of profit warnings.
But executives across the sector have stubbornly resisted cutting the number of tickets on offer to raise prices, telling investors that short-term profitability is a price worth paying to maintain and grow market share.
With analysts forecasting capacity increases this winter of eight percent - the highest in a decade - the pressure is likely to keep rising in the coming months.
"There's more supply coming on this winter and next summer and that's why the market's got very scared," said a top-30 shareholder in easyJet, speaking on condition of anonymity. "And that's just not going to change any time soon."
"This is a tough year and you've just got to wait it out."
On Tuesday Ryanair followed rivals including low-cost carrier easyJet, British Airways-owner IAG and Germany's Lufthansa in issuing a profit warning, saying its profits would grow 7 percent rather than the 12 percent previously guided.
But company shares climbed on the news as investors focused on O'Leary's promise to ramp up capacity growth and grab market share.
"In every market we are competing with other incumbents, whether they be allegedly low cost carriers or legacy carriers. We are taking very significant traffic away ... and we see that continuing," O'Leary said.
Low prices will last "two years if not more," he warned.
Ryanair, which hopes to lift its European short-haul market share to around 20 percent by 2024 from 14 percent now, said it would add 6 million seats over the six months to the end of March, up from an earlier forecast of 4 million.
The airline intends to add 50 planes in the year to July 2017, up from 36 in the previous year. O'Leary said the company may add more than 50 planes in 2018 and 2019.
It says its business model, which fills planes irrespective of ticket price to minimise passenger costs and boost spending on extras, is uniquely suited to a period of low fares.
"There's never been a worse time to be a competitor of Ryanair," O'Leary said.
Investors in some rival airlines fear he may have a point.
The founder of easyJet, Stelios Haji-Ioannou, whose family remains the airline’s biggest shareholder with a 34 percent stake, believes the airline should start cutting capacity at the next available opportunity in 2018, revisiting his public opposition to easyJet Chief Executive Carolyn McCall's 2013 deal to buy 135 new Airbus planes.
"Stelios has been very firm about this ever since 2013 that the fleet growth plan would be destructive of total shareholder value and it looks like he’s right," his spokesman told Reuters.
easyJet’s earnings per share will fall by more than 20 percent for the 12 months ended Sept. 30, a year in which it has grown its fleet by 16 planes, followed by a further forecast drop of 10 percent this year, according to Reuters data, as it adds 20 planes. Fleet growth is anticipated to continue at a similar rate in 2018 and 2019.
McCall has said the current tough environment is the right time to take advantage of its bigger scale and lower cost operations.
"History shows that at times like this the strongest airlines become stronger," McCall said earlier in October.
But the collapse in fuel prices, which typically accounts for around a quarter of airline costs, has thrown a lifeline to many airline owners, and there has been precious little sign of capacity leaving the market.
Holiday airline Monarch was last week kept alive by a bailout from investors. Lufthansa agreed to lease 40 planes from loss-making Air Berlin, keeping capacity in the market.
Despite repeated failures in the past, Air France-KLM and Lufthansa are investing heavily in their respective low-cost arms, Transavia and Eurowings, extra capacity that is pushing down prices whether they make a profit or not.
"The problem is that at the moment the incumbents are in absolutely no mind to shrink," said Barclays analyst Oliver Sleath. "I think that investors need to be braced for a tough year or two."
easyJet is hoping its luck will turn after a year in which Islamist militants have staged attacks in France and north Africa, key markets to which it has been much more exposed than Ryanair. It is also far more exposed to Britain, which has been hit by a steep fall in sterling since the June 23 Brexit vote.
It sees Ryanair's decision to pull planes out of the United Kingdom - its largest market, where it has cut its growth rate to 6 percent from 15 percent this year due to uncertainty around Brexit - as a sign of weakness.
An easyJet source said the airline wants to take advantage of Ryanair's withdrawal in the UK, helping to get shareholders on board with its growth plans.
"When we update the market in November we will provide more granularity of where we are adding capacity, at places like Luton, Manchester, Berlin and Toulouse, and we believe that this will help reassure them (investors)," said the source.
Some analysts feel Ryanair has had some luck on its side this year. O'Leary admitted that recent decreases in the number of empty seats on planes had likely ended, which may deprive them of a tailwind on costs.
And its high proportion of early bookings means more than half of its summer tickets were sold before Brexit hit the value of sterling.
But overall, analysts appear more confident in Ryanair's ability to withstand the pressure, with just one out of 20 polled recommending investors sell the company's shares compared to five out of 25 at easyJet.
Shares in easyJet, half of whose passengers originate in the UK, are down 40 percent since the Brexit referendum compared to a fall of 11 percent at Ryanair.
The question to be answered in the coming months is whether the inevitable retrenchment will start to hurt easyJet or Ryanair too or whether it will mainly affect their weaker, smaller rivals and less lean carriers at the higher price point.
"Taking a longer term view, probably it's still the case that easyJet is in a better position than a lot of the legacy airlines," said Jonathan Wober, chief financial analyst at CAPA-Centre for Aviation.
"It's just about getting the balance right and that really does depend on how long the over-capacity remains."