The Dublin Airport Authority's (DAA) share of the looming deficit in the pension scheme for State aviation workers could be as high as €138 million.

The DAA, which is in the middle of a major capital expansion programme, said in its 2005 accounts it could not determine its share of the potential deficit if payments in future continued to be inflation-linked.

But work done by advisers to the trustees of the Irish Airlines (General Employees) Superannuation Scheme has identified a potential deficit of approximately €138 million. Other companies affiliated to the scheme are Aer Lingus and the aircraft maintenance company SR Technics. The scheme in total is facing a deficit of €336 million, according to an actuarial valuation.

Recent calculations suggest that SR Technics would inherit a €27 million share of the deficit and the Aer Lingus "share" would be €171 million.

These deficits are based on the scheme continuing to pay inflation-linked increases into the future. The scheme is currently in surplus, but this is expected to change in the period ahead unless extra funds are put into the scheme by way of additional contributions.

In a letter from Mercer, the pension consultants, sent to the pension scheme trustees in recent months, the company said: "If the assumptions underlying the valuation projections are borne out in practice, then the scheme will not be able to continue awarding pension increases linked to inflation".

Siptu, the largest union at the airport, has written to the DAA asking what it intends to do about the looming €138 million deficit. The letter has been sent to the human resources director of the DAA, Damien Lenagh.

The authority said yesterday: "The scheme is presently in surplus. Payment of index-linked benefits is discretionary and payments can only be paid from available surpluses. This is based on an annual decision by the trustees of the scheme."

The letter from the Siptu aviation branch says: "There is now an urgency on the Dublin Airport Authority to make immediate provision for the €138 million deficit/ deficiency in the scheme".

The DAA plans to spend €1.2 billion over the next few years on capital projects, including a second terminal, a new runway and a Pier D facility with parking stands for 14 aircraft. It is calling on the aviation regulator to allow a €7.50 per passenger charge to pay for some of this development.