No link has been made between the provision of a new terminal and 'low'landing fees, writes Arthur Beesley

The Government report on "aviation issues" will not make happy reading for Ryanair's chief executive, Mr Michael O'Leary. Indeed, it appears to demolish a number of myths long touted by the flamboyant businessman who agreed this week to purchase 100 new jets from Boeing.

These aeroplanes will form the backbone of the carrier's expansion in the next 10 years. But it is now clear that any Irish elements of that expansion are not going to be based on Ryanair's favoured model. Informed political sources said the report produced by a London-based aviation consultant, Prof Doganis, is very likely to be adopted by the Government.

The report also offers a degree of comfort to Aer Rianta, whose expensive capital plans were bluntly rejected in a damning determination on landing fees by its regulator last year. Still, the State-owned company is urged to give high priority to meet the specific needs of the "low cost" sector in the shortest time possible. While this means a new terminal opposed by Aer Rianta - Pier D - might yet be built, the report says such a building should to available to Ryanair's competitors too.

Crucially, however, Prof Doganis draws no link between the provision of such a terminal and "low" landing fees.

Such a combination has been the holy grail for Mr O'Leary, who has fought a long campaign for a special terminal at Dublin Airport in return for a promise for fees of €1.27 (£1) per passenger. To his annoyance, such proposals have been rejected on a number of occasions by Aer Rianta and by the Minister for Public Enterprise, Ms O'Rourke. He took to making very immoderate comments about Ms O'Rourke and Aer Rianta with great regularity.

Mr O'Leary's latest attempt to extract concessions from the Government for his publicly quoted company followed the attacks on the US on September 11th last year.

On November 9th, with dire projections made about the prospects for the Irish tourist business, he wrote to the Taoiseach, Mr Ahern.

He wanted landings charges of €1.27 per passenger for 10 years; and the construction of a new pier at Dublin Airport for the exclusive use of "low-cost" airlines. This was the only stimulant likely to revive the tourist industry because "low" airport charges would foster the growth of carriers such as his own.

In response, an inter-departmental subcommittee on "visitor issues" sought the construction of a "low-cost facility targeting low-cost carriers". Its demands were rejected by Aer Rianta. Then Prof Doganis was appointed.

Telling observations are made in his report. Noting that Aer Rianta's landing charges have been "very low" compared to its European counterparts, he says lower charges should not be used as the prime instrument for stimulating new air services and incoming tourism.

Prof Doganis says such measures should be rejected because they have "little impact" on route planning decisions by airlines and have only a minimal impact on total holiday costs.

The adoption of such measures would mean that Aer Rianta would have to increase the fees charged for other services and might be considered as "illegal state aid" by the European Commission.

While Mr O'Leary has often linked his firm's development plans to the fee regime at Dublin, Prof Doganis says there is "no evidence" to support views that charges have a significant effect of airlines' route decisions.

He adds: "High add-ons have not stopped Ryanair from launching services to several high-cost airports. Stansted's add-on is the highest yet Stansted is Ryanair's major base outside Dublin."