BOSSES at Southampton Airport's biggest airline Flybe went on the offensive today over warnings from rivals of a "bloodbath" in the industry.

The company announced its second straight year of profit growth with £3.1m from record numbers of four million passengers in 2003/04.

But MD Jim French hit back at Ryanair boss Michael O'Leary, who forecast sky-high oil prices could destroy profits and spell the end for smaller rivals, such as Flybe.

"It is clear from his comments that he doesn't understand our business model . . . and therefore should refrain from commenting on things he clearly has no comprehension of," blasted Mr French.

Industry commentators suspect Mr O'Leary's bloodbath outburst is a ruse to lower public confidence in rival operators' ability to stay trading so Ryanair looks a more reliable choice for a holiday.

Always a larger than life character, Mr O'Leary is also sending a message to rivals to stay out of the congested budget market.

Mr French said: "It is not unknown for companies with dominant market positions to seek to abuse that power to resolve their own issues."

Flybe, which considers itself more of a middle market airline, is positive about the future with passenger numbers for the first quarter of 2004 up 43 per cent

Mr French shrugged off fears of an oil price inspired catastrophe and said their report was good news for passengers and his 1,500 staff. "Cash revenues are strong and healthy, we are in a better position than we have ever been."

He taunted Ryanair's position after the company's announcement this week of its first fall in profits since 1989.