The ad appeared on Friday, a week after the 7/7 terrorist bombings on the Tube and a bus, and the day after London came to a standstill to hold a two-minute silence in remembrance of the 54 victims. By the end of the day, the Advertising Standards Authority had received 192 complaints, with the airline refusing to withdraw the ad.
It parodied Churchill's famous speech of defiance during World War Two, where he vowed that the Allies would "fight them on beaches, fight on the landing grounds, we shall fight in the fields and in the streets, we shall fight in the hills, we shall never surrender".
With the headline "London Fights Back", it used a picture of Churchill giving his famous V for victory sign, and a bubble reading "We shall fly them to the beaches, we shall fly them to the hills, we shall fly them to London!"
Ryanair has said that the campaign is to help London get back on its feet after the attacks.
Peter Sherrard, head of communications for Ryanair, told the BBC: "People should be encouraged to live their lives as normal and not to be defeated by terror.
"By dropping fares, by bringing forward route launches, we are trying to stimulate the tourism market to make sure London keeps flying."
The airline had reported earlier last week that bookings were down since the attacks.
It's not the first time Ryanair has been in trouble with the ASA. Previously, it has taken flack over claims that it flew to Lyon, when it actually flew to St Etienne, 46 miles away from Lyon. And in 2001, two ads were banned after complaints that they contained sexual innuendo. One read: "Blow me! These fares are hard to swallow", and another "Satisfaction guaranteed". The ads backed a St Valentine's day promotion.
It also raised eyebrows with ads attacking its rival easyJet that featured the notorious Iraqi information minister, Muhammad Saeed al-Sahaf.
Diet brand Slim Fast came under fire for a summer promotion last year, showing women in bikinis with the headline, "We shall fight them on the beaches". It appeared on the 60th anniversary of D-Day.
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