Aer  Rianta has confirmed that it is negotiating with a large airline to begin operating routes from Dublin Airport.

But chairman Mr Noel Hanlon declined to comment on suggestions that the airline was budget-carrier EasyJet, which would operate routes to Spain.

Mr Hanlon was speaking after the company announced results yesterday showing a 33 per cent fall in profits before exceptional items to €30.8 million last year, which it attributed to the difficult trading environment in 2001 and the significant cost of investment in infrastructure.

Despite turnover growing by 3 per cent to €438 million, group profit after tax and exceptional items was down to €11.6 million from €45.6 million in 2000, which the company said reflected the impact of €23.4 million in restructuring costs. This once-off provision was for a voluntary severance scheme that would result in up to 300 employees leaving the company.

Commenting on the results, Mr Hanlon said "2001 was a challenging year for the company with both the foot-and-mouth crisis and the terrorist attacks impacting on the company's operations. Despite this, more than 18.5 million passengers travelled through the airports at Dublin, Shannon and Cork, representing a 3 per cent increase on 2000 figures."

Traffic for the year to date was up by 6 per cent on the same period last year, Mr Hanlon said, adding that Aer Rianta was expecting an additional one million passengers this year.

The bulk of the rise this year is Irish-originating traffic, with around 1.5 per cent accounted for by incoming tourist traffic.

Mr Hanlon said the rise in passenger numbers was not solely due to Ryanair. "Sixty-eight airlines are operating in the airport and Ryanair accounts for 25 per cent, which is what it has been accounting for over the past few years," he said.

Planning permission for a new pier at Dublin Airport to provide fast turnaround facilities for low-fares airlines will be sought by Aer Rianta shortly. Mr Hanlon said the new pier complies with the Government's request for extra facilities at Dublin Airport and that it will cater for 10 million passengers.

"This is a quick changearound facility, but charges will be the same," he said, adding that the terminal could cost up to €60-€70 million to build.

Mr Hanlon said the company's judicial review against the aviation regulator's determination on airport charges would come before the court on July 17th, when a date will be set for a hearing.

"If we lose, it will have serious implications for our investment programme," he said. "There's going to be a shortage of money."

He said the aviation business was generating only 24 per cent of revenues because landing charges were too low.

Commercial business, which generates 57 per cent of revenues, and other activities were subsidising the aviation business, which was losing €29 million a year, he said.

Aer Rianta International reported a 10 per cent rise in after-tax profit to €13.3 million, while the Great Southern Hotel division saw after-tax profits fall by 34 per cent to €3.2 million due to difficult market conditions.