The chief executive of Shannon Development yesterday warned of further job losses at the company in order to cut costs.

In the past two years the number of people working at the regional development company has fallen from 195 to 170 and the board has set a target of reducing the workforce by 25 per cent from 2003 job levels by the end of this year.

The company employs 170 and is seeking to reduce headcount to 150 by the end of the year.

But Shannon Development's chief executive, Kevin Thompstone, warned yesterday that job levels may even go below the 150 mark under any new revised mandate received from the Minister for Enterprise, Trade and Employment, Micheál Martin.

The company's recently published annual report recorded an operating deficit for the third year in a row with the company running a loss of €1.45 million last year on a turnover of over €40 million.

However, job cuts through a voluntary redundancy programme at the company helped reduce deficit levels last year by €3 million on the 2003 loss of €4.8 million.

Mr Thompstone said: "The reality is that incomes haven't been growing and the cost base has been rising in recent years.

"We recognise that. That is why we started a change-management programme two or more years ago and unless we address that issue we are going to be running into problems."

Mr Thompstone and board chairman Liam McElligott recently met with Mr Martin to discuss the company's future, having lodged a strategy statement on the future development of the company in March with the department.

On Shannon Development's future, Mr Thompstone said: "I think the Minister realised that this strategy wasn't just pulled out of the air in a few days before the meeting, that it has a good foundation, is customer-driven and fits with economic policies we have nationally."

He added: "We don't have formal sign-off on the strategy. The dialogue will continue, but I would be hopeful that we are getting close to D-Day on that."

In the statement, it is understood that Shannon Development is willing to provide revenues from its annual €10 million in gross rental income it generates from the Shannon Free Zone to the Shannon Airport Authority (SAA) in order to stave off attempts by the Government to transfer the asset-base to the SAA.

Mr Thompstone said: "We're willing to leverage our asset base to resolve a funding gap if it is required at the airport side. We won't be found wanting on that front."