Employers and unions claimed yesterday that the "greatest challenge" facing the west was to secure new business at Shannon Airport.

Employers' organisation IBEC and the Irish Congress of Trade Unions (ICTU) said in a joint statement that jobs would be lost if the withdrawal by airlines of 96 flights per week was not addressed by the Government.

The Cabinet is expected on Tuesday to discuss a report by an inter-Departmental working group on tourism which has recommended the construction of a "low-cost" pier at Dublin airport to boost the tourism industry.

Aer Rianta has rejected the report, stating that initiatives were needed to support its airports at Shannon and Cork, but not Dublin.

A paper produced by the company is understood to have annoyed senior figures close to the working group, who argue that Aer Rianta should follow the guidance of the Government - its sole shareholder.

IBEC and ICTU said: "The contraction of air services at Shannon will impact negatively on business travel in terms of same-day access to Dublin and connectivity to European and transatlantic destinations."

They added: "The impact on tourism and business travel is directly affecting hotels, B&Bs, restaurants and cultural and visitor attractions in the west.

"Many companies are dependent on the airport to transport air freight and cargo to market."