* Lufthansa's 109.7mn passengers in 2016 below Ryanair's 117mn
* Most budget rivals saw strong passenger growth in 2016
* Lufthansa expanding Eurowings budget brand
* Ryanair has set sights on Germany
 
Ireland's Ryanair has overtaken Lufthansa as Europe's biggest airline by passenger numbers after the German carrier on Tuesday reported a meagre 1.8% rise in the number of people it flew in 2016.
Lufthansa's 109.7mn passengers last year fell short of the 117mn passengers reported by low-cost carrier Ryanair last week, a 15% increase on the previous year, as Ryanair pulled in passengers with low prices.
The year saw strong performances from other budget carriers, with Norwegian Air Shuttle reporting passenger numbers up 14% to 29mn and Wizz Air up 19% to 22.7mn.
EasyJet, which suffered more than low-cost rivals from strikes in France and tourists avoiding destinations hit by attacks, grew passenger numbers 6.6% to 74.5mn.
Lufthansa is expanding its Eurowings budget brand to try and regain market share lost in Europe and it is set to grow fast this year with deals to lease planes and crew from Air Berlin, plus take over Brussels Airlines.
However, Ryanair has set its sights on Germany as one of the countries in which it wants to expand and will in the summer start flying from Lufthansa's home base of Frankfurt.
Lufthansa remains the largest airline group in Europe in terms of revenue because it does more long-haul flying and has its own catering and aircraft maintenance units.
Air France-KLM reported a 4% rise in group passengers to 93.4mn, helped by low-cost unit Transavia, which carried 23% more passengers.
IAG carried 100.6mn people in 2016, an increase of 14% and overtaking its Franco-Dutch rival, after it acquired Aer Lingus in August 2015.