A looming pension deficit at Dublin Airport was among the factors which influenced this weeks decision to increase airport charges, it has emerged.

Documents released this week show that an emerging deficit in the pension scheme linked to the Dublin Airport Authority (DAA) played a part in the calculation of the new airport charge at Dublin.

The scheme, which also covers Aer Lingus and some SR Technics staff, is expected to go into deficit if it keeps paying out index-linked pension increases.

Consequently the DAA is anxious to set up its own fund and representations on this issue were made to the aviation regulator, Bill Prasifka.

Earlier this week Mr Prasifka increased airport charges by about 23 per cent to €6.14 per passenger, although this was far below what the DAA expected.

The impact of the decision is that Dublin Airport must not increase charges beyond a 'cap' or ceiling of €6.14.

In accompanying documentation the regulator acknowledges that it may be necessary for the DAA to set up its own pension scheme in future, seperate from Aer Lingus and SR Technics.

He also acknowledges that a new scheme is likely to contain some kind of deficit too.

Consequently he has made allowance in his determination for this.

"Due to the uncertainty surrounding the magnitude of the deficit, the commission believes it is prudent at this juncture, to allow some of the costs that DAA has estimated to fund the deficit of the pension fund it intends to create for its employees," states a report circulated by the regulator this week.

He says that as a result the price cap imposed this week includes "some of the higher pension contributions foreseen by the DAA".

But he adds: "However this treatment of the pension deficit is subject to adjustment".

The regulator acknowledges it could take some time before the DAA is able to set up a new stand alone pension scheme and this may pose a problem. But he says that allowance can still be made for the issue now and an "accounting procedure" will help to keep track of any funds.

Most staff at the airport are members of the Irish Airlines (General Employees) Superannulation scheme.

An actuarial valuation of this report recently warned that if index linked payments continue the fund could run into a deficit of between €300 and €400 million. This may not be a problem for the DAA in the short term, but it poses major challenges to Aer Lingus which is scheduled to sold off sometime next year.

The documentation circulated this week by the Commission for Aviation Regulation shows that Aer Lingus is strongly opposed to the DAA including any pension problems in the airport charges.

"Aer Lingus do not agree to such an increase. Furthermore, they believe there is no case for their customers to bear the cost of the enhancement.

"Consequently, they believe that there is no justification for allowing increased pension contributions in DAA's price limits," says the document from the regulator.

However the regulator says he believes - as a matter of principle - that users of the airport should bear "the efficient costs of remunerating the DAA's employees at Dublin Airport".

Yesterday Ryanair held a press conference in Dublin which heard strong calls for the regulator to reverse his decision of this week. Chief executive Michael O'Leary said he was considering taking legal action against the regulator.

Mr O'Leary strongly criticised the role of the Minister for Transport, Martin Cullen, in recent events.