The Ryanair boss addressed a UK parliamentary transport committee in London yesterday where he lambasted British aviation policies.
"It's much easier for us to take someone from Ireland to Spain or to France or to Italy than it is to take them here to the UK," he said. He claimed that made sense, particularly during off-peak times and in winter months.
He said there had been a "huge collapse" in Ireland-UK passenger numbers in recent years and said additional taxes have played a role in the fall.
According to the UK's Civil Aviation Authority, a total of 9.7 million passengers travelled both ways on scheduled air services between the UK and Ireland in 2011. That was up from 9.5 million in 2010, but down from 12.2 million in 2008.
"We would sell a lot of seats in winter for £10 (€12.40), £12 or £15 one way," he said. "But APD (Air Passenger Duty) accounts for the guts of a 100pc tax on that," Mr O'Leary said.
He claimed Ryanair would have delivered an extra 20 million passengers a year to the UK if there had been more competition and capacity at Stansted and other British airports.
Within the past few years Ryanair had boosted its annual passenger traffic to nearly 80 million a year from 40 million. He said at least half that growth could have gone to Stansted and other airports.
"At least half that growth could have been placed at Stansted and at other UK regional airports and most of it has been lost. . . through the uncompetitiveness of APD and the uncompetitiveness of the airport charges, particularly at Stansted," he said.
He slated UK air transport policies and said that new runways were needed at all the three main airports around London – Heathrow, Gatwick and Stansted.
Ryanair is the biggest customer at Stansted. The airport is up for sale by Spanish-owned BAA after the UK's Competition Commission said in 2009 the group must sell Stansted, Gatwick and a Scottish airport.
BAA fought the decision and, while it sold Gatwick, it only this summer agreed to sell Stansted. Ryanair was poised to become a part-owner of Stansted as part of one of the consortia interested in buying the airport, but BAA said it was barring Ryanair from the sales process.
Mr O'Leary rubbished plans by London mayor Boris Johnson to build a new London airport hub as "insane" and "hare-brained".