A confidential Aer Lingus submission to the aviation regulator suggests that Dublin Airport should be set detailed performance targets and penalised if it fails to meet them.

The airline also claims there are too many "unresolved details" concerning the building of new terminal and pier facilities and these investments should not form part of the current determination on airport charges being carried out by Bill Prasifka, the regulator.

The airline says some of the new airport charges being considered by Mr Prasifka are "much too high" and the Dublin Airport Authority (DAA) needs to be asked to meet detailed performance targets and service level agreements. It says these need to be accompanied by effective penalties "for performance failure".

Mr Prasifka recently said airport charges in future would be capped at between €5.12 to €7.05 in Dublin. He is currently accepting submissions from airlines and other interested parties in relation to the precise cap.

The DAA needs the co-operation of Aer Lingus and Ryanair in the year ahead so it can plan the new terminal facilities. It recently hired London-based firm Pascal and Watson, the architects behind Terminal 5 at Heathrow, to liaise with the two big airlines on additional terminal capacity.

A submission from the DAA suggests that Mr Prasifka's review must ensure the company is able to retain its current A-rating from agencies like Standard and Poors. The DAA warns that if its rating slips any further its cost of borrowing could increase significantly.

The DAA is currently rated A-negative and Standard and Poors has warned that if the debts of Cork and Shannon are transferred to the balance sheet of Dublin it may have to cut the rating further. The DAA claims its "investment capacity" and cost of capital could be threatened if this happens.

The DAA suggests in its submission that passengers would be prepared to pay higher charges if they got better airport infrastructure in exchange.