Ryanair yesterday offered to build a new pier for Aer Rianta at Dublin airport, and guaranteed to generate an extra 1 million arrivals and departures on new routes to the continent - in exchange for a reduction in passenger charges. The airline also published a report it commissioned from DKM Consultants, the conclusions of which call for Dublin airport to be treated as a monopoly and regulated accordingly.

A spokesman for Aer Rianta said the company was carrying out a review of all its operations and options for the future, which would be given to the Minister for Pubic Enterprise, Ms O'Rourke, by the end of March. He said the company did not wish to debate the Ryanair issue before then.

Ryanair said it would build a new pier at Dublin airport, hand it over immediately to Aer Rianta, and pay the airport authority £1 (€1.27) per departing passenger for 10 years. This compares to an average of £4.60 (€5.84) in 1998, the airline said.

In addition, Ryanair said, it would guarantee to open at least ten new routes to continental Europe within two years, and deliver at least 500,000 departing passengers on these within three years. If it fails to deliver these numbers, the airline would undertake to pay Aer Rianta £8 (€10.16) per departing passenger for the number by which it falls short of the target.

"What Ryanair's chief executive Michael O'Leary is saying is that he is prepared to put his money where his mouth is," a spokesman for the company said.

The DKM report argues that, while Aer Rianta would lose money by reducing passenger charges, it would get a new pier built for free, and more than make up the shortfall through increased revenues from rents and concessions, car parking, shopping and catering, due to the increased volume of passengers.

The report concludes that the level of charges paid by Ryanair at Dublin airport is higher than at any of the British airports it serves, and 2.7 times higher than the average. It argues that the airport in the capital is a monopoly, and that its charges should therefore be regulated by the authorities.

It also suggests that Aer Rianta has been consistently profitable, with a rate of return on capital three times that allowed to regulated industries in Britain.

"The Minister should favourably consider Ryanair's proposal to develop low fare routes to Europe and the tourism, economic and job creation potential of this development," the report adds.