Aer Rianta has rejected a suggestion by the Tanaiste, Ms Harney, that no low-cost airline operates in the west of the State.

In a statement yesterday, the general manager of Shannon Airport, Mr Barry O'Shea, said Ms Harney was incorrect last week when she said a low-cost carrier was needed in the west. She said that "we don't have that at the moment".

Stressing that low-cost carrier Virgin Express had been operating from Shannon since last December, Mr O'Shea said the airline would carry more than 120,000 passengers in and out of Shannon this year.

Virgin Express will introduce a new European service from Shannon today, although a spokeswoman said last night that she was unable to disclose details on the new route. It is understood, however, that the company is planning to initiate a Brussels service.

The company is also believed to be in discussions to locate a training centre at Shannon. This would complement its existing business at the airport, where it employs 170 workers, between flight, maintenance, reservations and administrative staff. Mr O'Shea also rejected comments by the former Progressive Democrat leader, Mr Des O'Malley, who has claimed that passenger numbers at Shannon are stagnating. Stating that the airport was having its most successful year, Mr O'Shea said an additional 400,000 passengers would travel through Shannon this year, bringing the total to 2.2 million, up 17 per cent on 1998.

Ms Harney said last week that she would find favour with a Ryanair proposal to establish a new terminal at Dublin Airport, a plan which also involves the airline operating from Shannon.

In a separate development, workers at Cork Airport said union leaders should agree to a new social partnership pact only if agreement was reached to maintain the airport as part of Aer Rianta.

The Cork Airport Against Break-up group of workers is meeting SIPTU officials in Dublin today to express their concern that a consortium of Cork businessmen, led by property developer Mr Gerry Wycherley, is seeking to buy out the airport.

The future of Aer Rianta is the subject of a report by consultants Warburg Dillon Read, which is expected to be submitted to the Minister for Public Enterprise, Ms O'Rourke, by the end of the month.