The Minister for Transport, Mr Brennan and the Aer Rianta chairman Mr Noel Hanlon were at loggerheads last night with Mr Hanlon reluctant to step aside from his post.
It is believed that Mr Brennan favours Mr Hanlon stepping aside because of his long-standing opposition to the Minister's plans for the company.
But last night indications were that Mr Hanlon had no intention of stepping down from the Aer Rianta board and he would legally resist any attempt to remove him. If this remains the position, the Minister faces a serious dilemma.
He had planned to spend this week contacting senior business people to appoint the new boards of Aer Rianta, but some of them may be reluctant to serve while the differences between Mr Brennan and Mr Hanlon continue.
"The Minister wants to recruit heavy hitters to fill these boards, but some of them may not be eager to serve if there is a bad atmosphere and things have not been cleared up," said one source.
While Mr Hanlon is unlikely to serve on the new boards for Dublin, Shannon and Cork, the most pressing issue is whether the Minister will allow him to complete his term on the current Aer Rianta board which will remain the main board until legislation is passed later this year.
Sources have indicated that Mr Hanlon believes he has worked hard for the company over the last nine years and he still has a valuable contribution to make. He is now concentrating on an Aer Rianta board meeting due to take place tomorrow, when the changes announced by the Minister will be discussed by the seven-member board.
Among the issues to be discussed, is the status of the company's €250 million bond. This bond, which is secured on the assets of Aer Rianta, was downgraded to a minus rating last week by the London-based agency Standards & Poors.
Aer Rianta believes the syndicated finance provided by the bond was based on certain fundamentals that have now been jeopardised by the plans announced by Mr Brennan. However, the Department of Transport has so far dismissed suggestions that the bond issue could create problems for the Minister's proposals.
Aer Rianta board members are also likely to raise several other concerns tomorrow. One of these is that moving the debt of Cork and Shannon on to Dublin Airport's balance sheet could be construed as a form of State aid to regional airports.
While the Department of Transport disagrees with this interpretation, some of the Aer Rianta directors believe that regional airports that compete with Shannon or Cork, like Farnfore could object. Some Aer Rianta board directors also want to explore comments by the Taoiseach last week that 12 months consultation on implementing the changes will need to take place.
The most likely candidate to head up the Dublin board is financier and accountant Mr Paschal Taggart. Others names mentioned include Mr Sean Fitzpatrick of Anglo Irish Bank. Several international aviation figures are also expected to feature.
