There have been 1p flight sales before, but until now Ryanair has never paid for people to fly. Yesterday it began a giveaway of 1m flights where the airline pays the taxes, fees and charges, sparking an unprecedented rush of "binge flyers" clambering to book tickets for close to nothing.

The Ryanair website collapsed several times as 4m attempts were made to grab tickets in the first five hours after the offer went live at 10am yesterday. The airline said it had enjoyed its busiest day ever and an "unprecedented level of demand".

The giveaway comes as Ryanair struggles to fill its planes amid an unexpected drop in demand across the low-cost airline industry during April. The airlines have been hit hard by the doubling in air passenger duty just as they have been taking delivery of new planes and opening up scores of new routes. What the airline industry calls "load factors" - the proportion of seats filled in each plane - have dropped across the board.

A Ryanair spokeswoman said: "This is about getting bums on seats. We are paying to get passengers into our planes - we'll be paying the tax that they would normally have to pay. There's no point in flying planes empty."

Typically, Ryanair passengers flying from its London Stansted hub have to pay £35 to £40 in taxes, fees and charges for a return flight, including £10 in air passenger duty (APD) on outbound flights.

Ryanair's move was branded "grossly irresponsible" by Friends of the Earth. Its aviation campaigner, Richard Dyer, said: "Passengers may be getting a free ride, but the planet certainly isn't. It is unbelievable that Ryanair is resorting to such tactics."

The airline said it hoped to recoup the taxes it is paying on behalf of flyers by getting them to pay for add-ons such as onboard snacks, travel insurance, car hire and hotel bookings. "There has been a softening in the market and we're trying to get people back flying again."

Travellers hoping to take advantage of the offer yesterday had to battle not just a creaking website but also a myriad of add-on charges that made obtaining free flights difficult, although not impossible.

The airline's booking system automatically adds travel insurance of £6.50 per person, a priority boarding charge of £4 or more, and £10 per bag put in the hold. These can be removed before proceeding to payment, however credit or bank card charges cannot be removed.

The offer covers flights from June 2 to October 27 and includes most of the airline's routes, but the free flights are not available at peak travel times such as weekend getaways.

The cost of the giveaway to Ryanair is likely to be around £10m. A 1m-seat sale involves 500,000 outbound flights - which at £10 APD adds up to £5m. Other fees and charges - such as Ryanair's infamous wheelchair charge - already go straight back to the airline's coffers.

City analysts said the move was further confirmation that demand for air travel is entering a period of turbulence. A week before yesterday's announcement, Ryanair said it would discount 10m tickets over the summer, while easyJet said some ticket prices would fall due to intense competition.

Industry observers have warned that a boom in capacity is not helping either. Buoyed by stronger profits after years of difficult market conditions, airlines are investing billions of pounds in new aircraft and prices are coming under pressure as the likes of Ryanair and easyJet struggle to fill their new planes.

"It's all further evidence of a softening of demand. The Ryanair announcement is about launching an eye-catching promotion, grabbing the public's attention and getting people booking again," said Andrew Lobbenberg, an analyst at ABN Amro bank. An easyJet spokeswoman said the airline did not compete directly with Ryanair and would not be launching a similar offer: "As far as we are concerned it is just another publicity stunt."

British Airways added to fears of a widespread slowdown in the airline market by launching another major sale, its third in four months. The airline, Europe's third largest, slashed fares for a number of European routes on its lucrative summer schedule. However, a BA spokesman said the sale was not a kneejerk reaction and had been planned for some time.

"We often run tactical sales throughout the year and this is no different," he said.

Ryanair, easyJet and BA have admitted in recent weeks that they are struggling to fill their planes. Industry executives deny that the softer demand is due to a passenger boycott following an onslaught from green organisations, who are urging the government to curb demand for air travel by raising taxes.