Shannon Airport is beginning to lose ground because the new board for the Shannon Airport Authority (SAA) has not yet been installed.

That is the view of the chairman of the designate SAA, Mr Pat Shanahan, whose appointment was announced by Minister for Transport, Mr Brennan, last October. Delays in enacting legislation breaking up Aer Rianta have prevented Mr Shanahan from taking up his post formally.

At a Shannon Chamber of Commerce business seminar in Shannon yesterday, Mr Shanahan said: "Shannon is beginning to lose some ground, particularly in the low-cost carrier segment. If we had the board in place, we might be able to address the possibility of new routes."

He said: "The low-cost market is growing, but Shannon airport has lost low-cost carrier flights in the recent past and the routes are going in a negative direction.

"We have a number of routes we would like to develop out of Shannon, but I think there is a lack of flexibility there because of the uncertainty of the current situation. Airlines don't appear to be making permanent decisions, because they are obviously aware of the uncertainty as well. We are waiting for that to be clarified."

Mr Shanahan added that Shannon could develop into a low-cost European and transatlantic airport. This would require airport management to re-examine Shannon's financial model.

He said: "Shannon needs to grow its traffic fairly dramatically from where it currently is - and that means it has to attract low-cost airlines to the region."

Last year, Shannon recorded the lowest growth rate of Aer Rianta's three airports at 2 per cent - in comparison with the growth rate of 5 per cent at Dublin and 17 per cent at Cork. With the new terminal at Shannon able to cater for four million passengers per annum, the airport has spare capacity for 1.6 million passengers. Mr Shanahan said the airport also needed a commitment from existing carriers, particularly Aer Lingus, to build a viable business to the US all year so that Shannon would have two US destinations throughout the year.

The seminar was also addressed by Stansted chief executive Mr Terry Morgan. He said Stansted had increased its passenger numbers from one million in 1990 to just under 20 million last year, with 90 per cent of traffic coming from low-cost carriers.

Mr Morgan told the seminar that Stansted had gone from a £40 million loss in 1993 to a £40 million profit in 2003.

He said that Ryanair, which operates 67 destinations from Stansted, accounts for 65 per cent of Stansted's business.