The bonus was apparently contingent on pilots having logged at least 800 flight hours over the course of the previous year, but the letter claims few pilots will meet this threshold.
O'Leary said the decision was taken to cancel what amounted to 2% of the airline's total flights to avoid a sharp increase in delays because of a lack of reserve pilots. "Five hundred pilots with a four-week block of leave booked for October and 500 in November will have to work one week of that leave", he said.
However, after an intervention from the Civil Aviation Authority the airline will now have to accommodate passengers on rival airlines - if necessary.
Some 1,750 of the airline's 4,200 pilots had blocks of four-week leave due before the end of the year, he said.
"If Ryanair cared to share their pilots" rosters with us we'd be happy to analyse them for fatigue'.
Mr O'Leary blamed the crisis on the mismanagement of pilots' holidays.
The report revealed that O'Leary now sits top of the pay table for European airline bosses including those of easyjet and IAG, the owner of British Airways.
Companies that use online holiday planning software can encourage staff to request their holidays year round, and these details can be accessed and seen by everyone.
He said management were assured during the summer that it had enough pilots.
About 500 of Ryanair's 4,200 pilots are due to take four weeks of leave in a single block in October, he said, so may be asked to defer one week of that leave until after January 1.
He also said he was considering forcing pilots to change their holiday plans and said any pilot who failed to show up for work as a form of industrial action would be frozen out of pay talks and denied promotion.
Irish law allows Ryanair to avoid recognising trade unions but several sources said that both pilots and cabin crew are forming informal groups to increase their bargaining power, while taking advice from global labour rights groups.
"(Piloting a commercial plane) is very highly skilled but I challenge any pilot to explain how it is a hard job or how they are overworked", he added.
Ryanair has updated customers about the flight ordeal, which will affect 315,000 people.
"I seriously regret these cancellations and upsetting and worrying 80 million of our customers last week", he said. "We have only taken this decision to cancel this small proportion of our 2,500 daily flights so that we can provide extra standby cover and protect the punctuality of the 98 percent of flights that will be unaffected by these cancellations".