Ryanair said 120 pilots would be joining the firm in the next two weeks and 500 would be recruited over the next six months.
Following suggestions that pilots could try to get their way by working to rule, Mr O'Leary said: 'If you want and need to ask your staff to give up holidays no work to rule can alter that.
However, after an intervention from the Civil Aviation Authority the airline will now have to accommodate passengers on rival airlines - if necessary.
Many of Ryanair's pilots are now employed via temporary agency contracts, among the factors that allow the no-frills airline to keep costs down.
But they've been warned that if they don't accept the secondment from their current base, then the company will be left with "no alternative" except to "allocate you unpaid leave".
Mr O'Leary said pilots due to take a four-week block of holidays in the next few months because a change in annual leave rotas will be told to reduce that to three weeks.
'Michael O'Leary's statements are disgusting, we regularly fly over 40-44 hours in a week, 50-60 duty hours, waking up at 4 am plus commuting long distances, ' the pilot told MailOnline.
Norwegian says it has poached more than 140 pilots from Ryanair; Dublin-based Ryanair puts the number at less than 100.
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Ryanair has canceled 2,100 flights over a six-week period in September and October to compensate for a shortage of pilots on standby caused by a miscalculation in annual leave.
He added:"I don't even know how there would be industrial action in Ryanair".
He accused some pilots of being "precious about themselves" and "full of their own self importance".
Pilots have already been offered £12,000 to work through their holiday to ease the crisis but many have refused.
In the meantime, consumer rights organisation DECO said that passengers affected by the cancellations here in Portugal could receive compensation of up to 400 euros.
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 worldwide labour rights groups.
"I seriously regret these cancellations and upsetting and worrying 80 million of our customers last week", he said.
"By the end of this week over 95% of customers will be rebooked or refunded", said Mr O'Leary.