Flamboyant Ryanair boss Michael O'Leary is to ease stringent travelling conditions for his passengers / Rex Features

Chief executive concedes that website of arch-rival easyJet is 'much better'

"Hug a passenger" may be pushing it, but Europe's biggest budget airline is bowing to passenger pressure and abandoning its most unpopular practices.

Ryanair, long the butt of jokes about its uncompromising policies, has promised to be more flexible about cabin baggage, cut the onerous fees charged for simple mistakes and reduce the cacophony of inflight sales pitches. And its chief executive has conceded that the website of arch-rival easyJet is "much better" than Ryanair.com.

In an exclusive interview, Michael O'Leary told The Independent: "This year we carried 81 million passengers, far more than easyJet. To be fair to easyJet, I think their website is much better, so we need to close that gap".

Ryanair has long made more money than easyJet, both in absolute terms and for each passenger flown. But last month the Irish airline issued a profits warning, while this month its British rival predicted higher than expected full-year profits. The most optimistic easyJet forecast and the most pessimistic Ryanair prediction are almost identical, at just under half-a-billion pounds. Since Ryanair carries 25 per cent more passengers than easyJet, its earnings per customer are likely to be significantly less than its rival's.

Mr O'Leary rejected the suggestion that he had undergone a "Damascene conversion" in response to dwindling fortunes relative to his main competitor. He insisted: "Our customer service is far better, our fares are lower and falling while easyJet's are much higher fares and rising, and our punctuality is better."

His airline appears, though, to have recognised that customer loyalty is important. Ryanair has promised passengers an easier journey at every stage, starting with booking.

At present no schedules or fares are revealed on the Ryanair website until the prospective traveller has successfully typed in a "Recaptcha" security code shown on the screen. The intention is to confound automated "screenscraper" programmes, but the effect has been to frustrate potential customers. The hurdle will be removed next Friday - at the same time as a cooling-off period is introduced.

The airline said: "Customers who book directly on the Ryanair.com website (i.e. not via travel agents or screenscrapers) will be given a 24 hour grace period from the time of their original booking, to correct any minor errors". This covers anything from mis-spelling to mistaken routings made in the original booking.

Over the years Ryanair has implemented steadily more draconian policies on cabin baggage, with fees raised to levels where they resemble on-the-spot fines, often more than the original fare. At present the airline insists that each passenger can bring only one 10kg bag. Any transgression - such as exceeding the weight limit or carrying a small extra bag - obliges the traveller to check the case in, and pay £60 for the privilege. From the New Year charges will fall. And starting on 1 December, passengers will be able to bring a small extra bag with a volume of up to 14 litres, such as a handbag or duty-free purchases, in addition to the existing case.

Ryanair was the first European airline to demand that every passenger prints out their own boarding pass, and has a fixed penalty of £70 for anyone who fails to comply. From next month, so long as the traveller has gone through the online check-in process, the charge will be cut to £15. The airline is lagging behind rivals in harnessing smartphone technology, but plans to start trialling check-in with hand-held devices in the spring.

The policy changes represent a volte-face on the airline's previous doctrine, which maintained that stiff penalties are essential to ensure operational robustness - and that "ancillary" sales are crucial to maintain the airline's profitability.

Inflight sales may be hit by a dramatic change in the on-board environment, at least on early-morning and late-evening flights. Starting on Friday, the relentless cacophony of inflight announcements - selling food, drink and scratchcards - will diminish. Before 8am and after 9pm, the only announcements will be the minimum necessary to meet safety rules. In addition, the cabin lights will remain dimmed.

Some long-suffering passengers may infer that the move to quieter cabins presages the launch of long-promised transatlantic low-cost flights. But Mr O'Leary said he would begin links from Europe to the US only when "We can get a fleet of long-haul aircraft cheaply, which I suspect sadly won't be for another three or four years".

Earlier this month the low-cost airline Norwegian announced it will fly from Gatwick to New York, Los Angeles and Florida from next summer. But Mr O'Leary said "It's not particularly low-cost service, and it's too small to make any impact on the market. We're talking about doing 20 European cities to 20 US cities, and the fares will start at €10 one way." Air Passenger Duty, currently £67, and other charges will be added to the headline fares.

Europe's second-largest budget airline, easyJet, declined to comment on the Ryanair moves. But a spokesman for BA said: "At British Airways we provide inclusive fares, not cheap-looking basic fares with a long list of add-ons. We provide free food and drinks on all flights. We provide free seat selection within 24 hours of departure. We make no charge for bookings by debit card. We make no charge for checking-in and we fly to mainstream airports across Europe."

Michael O'Leary also waded into the debate on additional runway capacity in south-east England, currently the subject of Sir Howard Davies' Airport Commission. The Ryanair boss proposes a solution of building an extra runway at each of London's main airports - Heathrow, Gatwick and Stansted - claiming it will cause "the least environmental disruption" and that it would solve the capacity crunch "quickly, efficiently and affordably". The chief executive said it would benefit rather than damage communities by raising property prices. He said: "You already have airports there, the land exists for another runway, the aircraft are getting ever quieter and it will have a dramatic impact in boosting property values for all of the residents living in and around the three main London airports."