Ryanair shares fell by 5% this evening after the airline's deputy chief executive Michael Cawley said that average fares could fall by 10% in June.

Cawley was speaking to journalists following the launch of one million free seats in Europe, of which 150,000 to be from Ireland.

The market reacted swiftly to news that the airline's yields would be affected next month, when the majority of the free seats will be taken up.

Earlier this month the airline announced a seat sale after reporting a fall in its load factor - or the percentage of seats it filled - in April.

At the time, chief executive Michael O'Leary blamed the dip on increased capacity, as well as the doubling of UK passenger duties and higher airport charges.

It is hoped that this giveaway will boost demand on Ryanair routes and encourage passengers to pay for ancilliary services like car rental and travel insurance.

Ryanair shares closed down 29 cent at €5.30 in Dublin this evening.