Ryanair has said it plans to return cash to its shareholders from 2013 as it cuts capital spending by more than 90% after pulling out of talks to buy 200 aircraft from Boeing.

Ryanair also rejected recent speculation that it was preparing a third bid for Aer Lingus.

'In the absence of any decision by the Irish government to sell its 25% stake, a third bid by Ryanair remains highly unlikely,' Ryanair said in a statement published ahead of a briefing for its investors.

Ryanair's passenger traffic in December grew 12% from the same month last year to 4.9 million, bringing the number for the whole of 2009 to 65.3 million. The load factor, or percentage of seats filled, was 81% in December, up two points from December 2008.

Chief executive Michael O'Leary said it expected its cash reserves of €2.5 billion to grow 'substantially' by March 2013 due to the cutback in spending.

Meanwhile, Ryanair said today it would continue operating all its Italian domestic flights after a row over check-in documents with Italian regulator ENAC was resolved. The airline had threatened to ground the flights from January 23.

Ryanair had objected to a decision from ENAC to cut requirements on documents that passengers have to present before boarding the planes. The airline said the new requirements would not have provided a secure form of identification.

ENAC has now agreed that all passengers on Ryanair's domestic flights in Italy will provide either a passport or a valid EU/EEA national identity card in full compliance with its security requirements.

Ryanair shares closed 1.9% lower at €3.46 in Dublin this evening.

Aer Lingus confirms start of United venture

Aer Lingus has formalised its code-share agreement with United Airlines to jointly operate service between Washington Dulles and the Spanish capital Madrid. The service will be launched on March 28, and Aer Lingus says additional routes may be made available for sale during 2010 to start operation in Summer 2011.

Both airlines will equally share the commercial and operational benefits and risk, with Aer Lingus managing the operational aspects of the new services and United Airlines taking responsibility for generating revenue.

At the time of the original announcement early in 2009, Aer Lingus planned to provide three planes for the venture, but this was later reduced to one.

Aer Lingus shares closed 3% lower at 63 cent in Dublin this evening.