Ryanair founder Mr Tony Ryan has sold half his remaining shareholding in the low-cost airline, raising €25 million in the process. He sold five million shares at €5 each.

Meanwhile, as well as announcing several new routes, the company received a welcome fillip when its low-cost rival in Italy ceased trading last night.

Mr Ryan, a Ryanair director, now holds about 0.75 per cent of the company. He previously sold three million shares in June 2002 for €6.70 each.

Ryanair's chief executive, Mr Michael O'Leary, is the largest individual shareholder with around 5 per cent of the airline, or 40 million shares. He sold 4.5 million shares in June 2003, raising €23 million. Yesterday Mr O'Leary said he would not be selling shares "at these [ €5] prices."

Meanwhile, one of Ryanair's main rivals in Italy ceased trading last night, clearing the way for the Irish airline to increase its business there. Volare was the fourth-largest low-cost carrier in Europe, according to Goodbody analyst Mr Joe Gill.

"This is an important shift in a key market for Ryanair (and EasyJet)," he said. "It is concrete evidence of how severe the yield compression/oil price rise squeeze is having on financially stretched carriers."

Mr Gill said the consolidation of the sector was "in full flow".

Volare has about 24 aircraft and carried around five million passengers from Italy to elsewhere in Europe, according to Mr Gill.

Ryanair operates two bases in Italy - in Rome and Milan - and serves 15 Italian destinations. Mr Gill said that, according to its last annual filing to March, Ryanair carried more than four million passengers out of Italy.

Last night, a Ryanair spokesman said that Italy was the airline's second-biggest market.

Ryanair has been predicting for some time that "there would be casualties in the low-cost blood bath", he said.

Yesterday, the airline also announced four new routes to increase competition with EasyJet. It also said it would announce details of a 12th new base on Monday, expected to be in Liverpool.

Ryanair said it would launch daily routes from London Gatwick to Knock, and from Stansted to the Czech Republic, Spain and Poland. It also said it would increase flights on routes from Stansted to Cork and Shannon.

Mr O'Leary claimed that Ryanair was in talks on establishing new routes with more than 100 airports in central and western Europe that it does not already fly to. However, Ryanair will also drop some of its less profitable routes.

It is in talks with five airports and expects to announce a decision to pull out of three of those within the next two weeks. - (additional reporting, Reuters)