The airline will be pulling out of George Best Belfast City Airport with effect from October 29, the start of the winter timetable.

Air Berlin had no immediate comment to make, but yesterday it reported that bad summer weather had depressed demand generally and bemoaned rising operating costs.

A spokesman for the airport said: "While we are disappointed to lose the daily service to Stansted, we still operate services to London City, Gatwick and Heathrow, as well as a growing portfolio of other destinations."

Joachim Hunold, chief executive officer of Air Berlin, said yesterday that a downturn in demand over the last three months had led to "aggressive competition" in the industry.

Air Berlin, which is Europe's third biggest low-cost airline, launched its Stansted service in May last year.

The airline's opening offer was fares starting at £19 single to London, and £29 to eight Continental destinations.

Air Berlin operates two flights each way on weekdays and one flight in each direction on Saturdays and Sundays.

The news is a blow for the City Airport, which has been expanding with the announcement in July by Ryanair that it will start flights to Prestwick, Liverpool and East Midlands in October.

With Aer Lingus due to start operations to eight destinations from Belfast International at the end of this year, the battle for business between the airlines is set to intensify.

Aer Lingus reported today that the aborted 48-hour strike by its pilots was likely to land it with a bill for €3.5m (£2.3m).

The Irish airline said, however, it remained confident that it would hit its target of a million passengers a year from Belfast.