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Ryanair CEO: We respond to terrorist attacks by lowering fares even further

Despite recent terrorist attacks, airport security in the U.S. and Europe is "pretty effective" the chief executive of low-cost Irish carrier Ryanair told CNBC on Thursday.

"But if some nutter wants to walk into a terminal building or a downtown subway, what are you going to do?" CEO Michael O'Leary asked, referring to the suicide bombings on the main airport in Brussels and a city subway station.

In an interview with "Squawk Box," O'Leary said security during flights is "pretty safe," but that view could change when the cause of last week's deadly EgyptAir crash is determined.

The Paris-to-Cairo flight went down in the Mediterranean as the plane entered Egyptian airspace. The cockpit data and voice recorders, commonly known as the black boxes, have not been found.

Egyptian authorities initially said terrorism rather than technical problems was more likely the cause.

From a business perspective, the best way to respond to terrorism is to lower airfares, O'Leary said.

"So in actual fact, the impact of the terrorist is on airline ticket prices, which are being driven down at the moment," he said. "We're expected to lower our prices by about 7 percent for the rest of the summer to keep people flying."

As for the long airport security lines in the U.S., O'Leary said they're being caused by gridlock created by the "ludicrous amount" of bags Americans are carrying onto the planes to avoid paying baggage fees. He said carriers need to do a better job of policing the number and size of bags being allowed on board.

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— Reuters contributed to this report.