Business Opinion: The unveiling by the Dublin Airport Authority of its plans for a second terminal at Dublin Airport provoked what appeared to be a typical enough response from Michael O'Leary.

Within a matter of days he availed of a press conference to announce new routes from Dublin to get stuck into the DAA, who want a 25 per cent increase in passenger charges - to €7.50 - to pay for the 75,000sq m building.

O'Leary wants the cost to be borne predominantly by the users of the €395 million new terminal - Aer Lingus passengers. It was vintage stuff: "The Government promised to give us a competing second terminal. It turns around three years later and says no, the same idiots who've made such a mess of Dublin Airport should now build the second terminal. Why? Well because they have proven to be world leaders in incompetence, muddle and fudge."

But when it actually came down to what Ryanair might do, O'Leary was evasive. A "fuller statement" was promised but as of the end of last week it had not materialised and O'Leary declined to comment on whether Ryanair would object to the terminal via the planning process.

O'Leary is clearly weighing up his options. In many ways his bluff has been called by the DAA already. His decision to start adding routes out of Dublin in the last year - despite failing to get his way on either the terminal issue or landing charges - is a clear indicator that Ryanair could not afford to ignore indefinitely the business available as a result of the economy's strong performance.

And it certainly could not afford to do so as Aer Lingus crawled its way to a stock market flotation predicated on increased short-haul traffic out of Dublin .

In fact, one suspects the issues raised by the Aer Lingus flotation have made O'Leary stop and think about his response to the second terminal.

Amongst the long list of risk factors contained in the Aer Lingus IPO document is item 2.1, which reads: "Dublin airport is currently Aer Lingus's principle base airport, on which it is dependent. Aer Lingus's expansion plans are heavily dependent on the development of Dublin airport and the availability of sufficient additional capacity there . . ."

It then goes on to say that Aer Lingus expects to benefit from the opening of any new terminal and the increased capacity offered but adds that this "poses significant risks, costs and challenges, including completion risk and risks associated with starting operations".

The point is then hammered home with the airline warning that if the plan is not implemented "as is currently anticipated or delayed Aer Lingus could incur greater unexpected costs and its expansion plans and overall growth strategy could be significantly curtailed".

The second terminal at Dublin airport is clearly Aer Lingus's Achilles' heel and, standing where we stand today, the man best placed and most likely to exploit it is O'Leary. All he needs is some sort of smokescreen to obscure his motives for delaying the second terminal. What could be better than the usual guff about protecting passengers from the DAA's incompetence?

Needless to say, this particular conspiracy theory has a great deal of currency in DAA circles as its premise is that the second terminal plan is sound and O'Leary's objections - should they materialise - have an ulterior motive behind them.

To support this view they claim that Ryanair has been kept in the loop for the second terminal and seemed comfortable with it in the context of a wider plan that envisaged a third terminal - in effect a Ryanair terminal in the way that Aer Lingus is the anchor tenant in the second terminal - to the north of the current one.

They claim that in recent weeks there has been something of a change of heart and Ryanair has reverted to a more hostile position, namely its long-term ambition to construct its own terminal. This is seen by DAA insiders as O'Leary laying the groundwork for a pitched battle over the second terminal.

The bad news for Aer Lingus is that either way O'Leary is going to cause trouble for them. He just has to decide what sort of trouble it will be.

It's not too late for him to play ball with the DAA on the second terminal and in the process wring a few concessions out of them. The result will be even more competition from Ryanair out of Dublin on those short-haul routes to Europe that are meant to provide Aer Lingus with growth over the next few years.

The alternative trouble is for O'Leary to take his planes elsewhere and do his best to strangle Aer Lingus at birth by wreaking havoc over the second terminal.

It's hard to know which type of trouble he will enjoy making most.