Ryanair boss, Michael O'Leary, insisted today that it will cost passengers a pound to spend a penny as he confirmed plans to charge for toilets on his aeroplanes within two years.

The chief executive of Europe's largest budget carrier said the airline would also generate extra revenues by removing two out of the three toilets on its Boeing 737-800 jets and filling the space with up to six seats.

O'Leary first mooted the toilet charges in February, prompting his press officer to warn that the outspoken executive "makes a lot of this stuff up as he goes along". However, O'Leary confirmed that he will ask Boeing to look at putting credit card readers on toilet locks for new aircraft.

"We are serious about it," said O'Leary, who has acquired the nickname Michael O'Really within aviation circles for some of his more outlandish claims. He added: "We are flying aircraft on an average flight time of one hour around Europe. What the hell do we need three toilets for?" He denied that Ryanair was considering the ploy to make a profit from toilet breaks. "It's not because we need to generate money from the jacks. But ... if you get rid of two [toilets] you can get six seats on a 737. They will all be scurrying to the toilet before the departure gate."

Asked if he would be interested in charging £5 a toilet visit in order to eliminate the need for the loo altogether, he said: "If someone wanted to pay £5 to go to the toilet I would carry them myself. I would wipe their bums for a fiver."

O'Leary added that Boeing's research department would now be able to work on the toilet concept because "war in Iraq and Afghanistan is winding down".

Ryanair is one of the pioneers of the add-on fees that are a distinctive feature of the low-cost business model and makes huge profits from imposing service charges that would have been unthinkable 20 years ago, such as bag check-in fees.

A poorly judged investment in Irish rival Aer Lingus pushed Ryanair into its first annual loss in 20 years today, but the airline is profitable once those losses are stripped out, helped by a 23% increase in revenues from add-on charges to €598m (£518m). Those so-called ancillary revenues now play an increasingly important role in underpinning Ryanair's profits and a loo fee will only increase their profitability.