"Like Christmas, my 18th birthday and an orgasm all rolled into one." Is the shy and retiring chief executive of Ryanair expressing his immense pleasure with (a) his recent marriage, (b) becoming boss of what was then a "with-frills" airline a decade ago, or (c) his first flight with arch-rival easyJet?

None of the above. Michael O'Leary is responding to my question about the dramatic fall in the value of the US dollar.

As you know, Ryanair is an Irish airline that flies predominantly between Britain and continental Europe. So why should the airline's boss celebrate the plight of the currency of a nation to which he does not fly? Because in the aviation industry, the cheerfulness of chief executives is in inverse proportion to the strength of the dollar. Everything from kerosene to aircraft leases is priced in US currency.

"The dollar is on the floor. We're buying aircraft at record low prices. Fuel is getting lower, spares are getting cheaper - it's never been a better time in the airline industry."

When Ryanair bought its first plane from Boeing five years ago, €1 (still a "virtual" currency at the time) was worth just $0.80. Yesterday, €1 cost $1.20. This represents a 50 per cent bonus for Ryanair, on top of the exceptionally low price it negotiated for more than 100 new jets when no one else was buying.

Now he has a fleet of 737s bought at distressed prices, all Mr O'Leary needs to do is to work out where to fly the things. That is the tricky part because, as he says, "Stansted is, to all intents and purposes, at morning and evening peaks, full." When he took over at Ryanair, no-one wanted to fly from the Essex airport. Now, everyone does. So on 14 January, the airline is to ditch four existing destinations - representing seven per cent of its route network from the Essex airport - and replace them with places that are further away. This strategy enables the airline to keep its planes in the air for longer while actually reducing the number of "rotations" (there-and-back flights) from Stansted.

Auf wiedersehen, Ostend; the Belgian resort is so close to Stansted that the typical flight time is only 30 minutes. But the Flanders coast has proved resistible to Brits, as Essex has to Belgians. Reims will be putting the champagne on ice, too, now that it is to drop off the map; one-third of the seats on planes going to the airport serving the Champagne region are flying empty, which threatens Mr O'Leary's state of bliss. And the Massif Central gets massively harder to reach from Britain with the disappearance of Clermont Ferrand from the schedules.

The most ignominious departure is the city of Maastricht, in southern Holland. The airport also known as Liege (North) and Aachen (West) is surely guilty of carelessness, having lost not one but two low-cost airline links from London. Virgin Atlantic pulled out in the Eighties, and now the airline of the happiest man in Christendom is to take its customers elsewhere.

Could the "Ryanair effect" be waning? The airline has done wonders for travellers (at least those with the good fortune not to require wheelchair assistance), and proved providential for previously moribund airports such as Prestwick in south-west Scotland. But users of Liverpool John Lennon airport may wonder just how bright the future is with Ryanair. This week, the Irish airline announced a new route from Merseyside - to "Barcelona", as it insists on calling the city of Girona. (The real Barcelona is already served by easyJet from Liverpool.) But the new link is at the expense of its existing service to Charleroi airport in Belgium. The Belgians, however, are striking back - and in Liverpool's favour. From 23 February, the Flemish airline VLM will fly between Liverpool and London City.

The Holy Ryan Empire, meanwhile, expands ever eastwards, in preparation for next year's enlargement of the EU. After easyJet announced a new base in the former East Berlin, Ryanair has hit back by offering flights to the finest part of the former DDR: Erfurt, in the middle of Thuringia, an area of ambitious hills and modest villages. The handsome core of Erfurt was successfully preserved in state socialist aspic for half a lifetime after the Second World War. This is one part of East Germany where the Communists failed to build big, ugly factories to pump out third-rate fridges and first-rate toxins.

Just down the road from Erfurt stands Weimar - home to Goethe, Liszt, JS Bach and the post-First World War Republic. And what befell that hapless entity? Ah, yes. Hitler. And, would you believe it, Ryanair is heading for the town where the genocidal dictator went to school. From the New Year, you will be able to fly from Stansted to the "Blue Danube" airport, serving the Austrian city of Linz. The new route brings the Danube Basin into the no-frills fold, and will attract plenty of passengers to and from the southern half of the Czech Republic; or so Mr O'Leary hopes.

The most intriguing new destination is Bari, on the heel of Italy - a sublime and neglected part of the country. The route from Stansted will offers a pair of possibilities that greatly enhance the opportunities for travellers: a fast track to Albania, Corfu and the Peloponnese. You can sail overnight across the Adriatic from Bari to the pretty Albanian port of Durres for less than €100 (£70) return. Buy your Ryanair flight during a special offer, and you could get the former Stalinist state and back for a total of £100.

Greece has more appeal for many travellers. So far, the island of Corfu has been a no-frills-free zone, despite rumours about easyJet planning flights from Luton or its new base in Berlin. Meanwhile Ventouris Lines will ferry you across from Bari to Corfu Town. Superfast Ferries, the company that sails between Rosyth in Scotland and Zeebrugge in Belgium, can offer a link from Bari to Patras on the Peloponnese, a short train ride from Olympia's ancient athletic stadium.

Should you use this link to stage your own version of the ancient Olympiad? Probably not, because it will require you to be (a) male, and (b) naked. Another worry is the expense of visiting Greece and anywhere else in the eurozone, compared with the new, appealing, low-cost US.

If the dollar stays weak, then - self-evidently - many things, from car rental to restaurant meals, in the US will be cheaper next year than this. Strangely, though, the decline in the greenback could see certain prices increase. For example, hotels in key cities set rates according to demand. If visitor numbers to Boston or New York increase sharply because of the fall in the dollar, this could push up rates by more than the beneficial effects of the weak currency.

You should also consider destinations whose currencies are tied to the US dollar instead. Some, such as Panama and Ecuador, use the US$ in place of money of their own. All other Latin American countries' currencies "shadow" the dollar, so you should find prices, from Argentina to Mexico, sharply lower. Likewise, Caribbean islands are dollar-dependent, and looking cheap.

Many other parts of the world also lock their currencies to the dollar, so expect bargains in places like Hong Kong and Thailand. But the Australian dollar this week hit a six-year high, making visitors less affluent. And the former Iron Curtain countries are increasingly tied to the euro, and so will be more expensive.

The strength of the euro will not directly increase the price of next summer's package holidays, because most tour operators "hedge" their currency requirements, fixing rates in advance. But the financial advantages of constructing your own package holiday, buying cheap flights and accommodation separately, will diminish. And however you construct your trip, budget for more spending money anywhere in the eurozone.

One country keeps the markets in perspective. In Suva, the capital of Fiji, the radio crackled urgent financial news: "The US dollar and the Japanese Yen have weakened against the Fijian dollar." You could sense the panic among Wall Street's brokers and the bankers in Tokyo.