Competition from a second management company at Dublin Airport would reduce the operating costs of airlines, the consortium behind the proposal to build a second air terminal at Huntstown, adjacent to the airport, claimed yesterday.

Mr Ulick McEvaddy entered the fray between Aer Rianta and Ryanair over landing charges, saying that his company, Huntstown Air Park, would charge less than Aer Rianta and "solve Michael O'Leary's problem".

But an Aer Rianta spokesman said there was no evidence that a terminal operated by a second authority at an airport brought charges down.

The proposal by Mr McEvaddy and his brother, Des, is currently the subject of an appeal to An Bord Pleanala which has been suspended pending a High Court decision on an order for disclosure of Aer Rianta documents.

Meanwhile, Mr O'Leary, the chief executive of Ryanair, described a meeting with the chairman of Aer Rianta, Mr Noel Hanlon, yesterday as an exchange of the respective positions, with no meeting of minds.

"We put our proposal to him: if the costs were reduced, we would undertake to grow our business from three to five million passengers a year, opening five to 12 new low-fare routes to European destinations," he said.

Mr O'Leary repeated that he would reduce flight frequencies from Dublin Airport in the new year if landing charges increase.

"Our traffic will go from three million to two million and Aer Rianta traffic and tourism will decline," he said.

The new chief executive of Aer Lingus, Mr Garry Cullen, also expressed concern yesterday at Aer Rianta's airport charges and said there was no clarity about what would happen to them when duty free is removed next year.

Aer Lingus will be meeting Aer Rianta executives next week to discuss the issue, he said. Mr Cullen acknowledged that passengers were experiencing difficulties at the airport, regarding car parking and facilities, and he said it would get worse next year. He said no one - including the airlines - had forecast the explosive growth in passenger numbers at the airport. Before the meeting with Ryanair, Mr Hanlon told the Today with Pat Kenny radio programme that the rebate discount system for airlines which reach agreed growth levels would be phased out over a five-year period, starting next year.

"Regardless of what Ryanair's attitude is, or what other airlines' attitudes are, they are going to have to pay an increased charge when duty free goes in 1999," he said.

Mr O'Leary said that it was now an issue for the Government to decide whether it wanted to develop tourist routes from Venice or Pisa in Italy, Stockholm in Sweden, or Carcassonne in the south of France.