DUBLIN (Reuters) Irish airline Ryanair plans to return cash to shareholders from 2013 as it cuts capital expenditure by more than 90 percent after pulling out of talks to buy 200 aircraft from Boeing Co.

Ryanair, Europe's biggest low-cost airline and close to being the biggest carrier overall, denied reports it was preparing a third bid for Irish rival Aer Lingus.

"In the absence of any decision by the Irish government to sell its 25 percent stake, a third bid by Ryanair remains highly unlikely," Ryanair said in a statement yesterday ahead of an investor briefing.

Ryanair's passenger traffic in December grew 12 percent to 4.9 million, bringing the number for the whole calendar year to 65.3 million, which it plans to raise to more than 66 million in the business year to the end of March.

"We expect our current cash reserves of 2.5 billion euros to grow substantially by March 2013 and we plan to distribute surplus cash to shareholders from that date," it said.