Aer Lingus chief executive Mr Willie Walsh has said the airline must cut another 60 million of costs from its business to remain a low-fares airline and compete with Ryanair.

Mr Walsh said the airline had managed to shave €255 million from its cost base in 2002 and this year at least another 65 million was needed. He said there was a "race" on between Aer Lingus and its rivals to remove costs from the business.

Mr Walsh was speaking after Aer Lingus was named Airline of the Year by the Chambers of Commerce of Ireland. It beat Ryanair to also take the Best Overall Value for Money Award. About 1,000 chief executives voted in the chamber survey.

Mr Walsh, speaking to The Irish Times, said the process of cost-reduction was constant and when costs were removed it helped push fares lower.

Asked how the company now differed from Ryanair, he said the "service ethos" of the airline was still relevant.

"Take a recent example on March 19th, when there was fog at Dublin airport. Ryanair cancelled all their flights, we didn't. That is the difference. There is a service level there with Aer Lingus and we will maintain that, whatever happens on fares," he said.

Mr Walsh said the company's transatlantic business was holding up well despite the recent events in Iraq.

He said total traffic on all transatlantic routes was up 19 per cent for the first four months of the year. "There was some softening during the war in Iraq, but the figures have come back again," he said.

Mr Walsh said Aer Lingus had done its work in bringing in tourists to the State and it was down to other players to play their part. He said hotels, pubs and restaurants needed to look at their charges. "We've done our bit by providing cheap access to the country, now it is up to others to move it to the next stage," he added.

However, he said he did not believe high prices were holding back tourist demand.

He also reiterated that Aer Lingus was not for sale and said there was no plan for a management buyout. He said all the energies of the management team were on "internal issues".

The leading players from the aviation industry were at the event, which is staged annually by a branch of the Dublin Chamber of Commerce known as the Air Transport Users Council.

The chairman of the council, Mr Tadhg Kearney, delivered a strongly worded speech which called on the Minister for Transport, Mr Brennan, to bring some clarity to the debate on the future of Aer Rianta and a second terminal at Dublin Airport.

"The debate to date has been diverse and constructive but the delay in the decision is causing uncertainty, which is not helping either Aer Rianta or the airports.

He also criticised the role of ICTU general secretary Mr David Begg in the debate. "No sectoral interest should be allowed to hold a veto over what is correctly in the final analysis a Government decision. Mr David Begg seems to feel that he has a veto."