The Government is expected to decide within a matter of weeks the scale of the civil airport to be developed at the Baldonnel military airfield in south-west Dublin. While the Cabinet has not yet discussed the matter, two key reports on the sale of state lands at Baldonnel and the future of Aer Rianta are near completion.
The Minister for Defence, Mr Smith, has indicated his preference to sell much of the Baldonnel lands to release funds to upgrade Defence Forces equipment. The Air Corps is likely to retain a section of the new airport for its own use.
The development of the airport could face planning objections on noise-pollution grounds from resident groups in its flight path.
The decision to sell the Baldonnel land is expected to be considered by the Cabinet along with a report on the future of Aer Rianta. The Minister for Public Enterprise, Ms O'Rourke, is considering options including selling off all of the semi-State company.
The Progressive Democrats have indicated their opposition to the sale of Aer Rianta to one party. They believe such a decision would only transform a public monopoly into a private one. The Tanaiste has proposed a break-up of Aer Rianta, with the sale of Shannon Airport the first step in the privatisation of the company.
Opposition to the sale of Shannon is growing in the mid-west region. Shannon Town Commissioners last week called on the Government to retain Aer Rianta ownership of the airport.
The Minister of State for Education and Science, Mr Willie O'Dea, said: "The Government has committed £40 million in capital expenditure to Shannon Airport and this investment can be best maximised if the airport remains part of the Aer Rianta group."
The Munster Fine Gael MEP, Mr John Cushnahan, said if the Government surrendered to the "disciples of privatisation" on the future of Aer Rianta, it would result in a cannibalisation battle between Dublin, Cork and Shannon Airports.
Meanwhile, Aer Lingus has said it continues to experience growth on all its Dublin-UK routes. This follows a statement from Ryanair which showed that passenger numbers between Dublin and British locations had fallen for the first time since 1991.