The number of commuters using the Luas fell by 8 per cent from 2008 to 2009, according to the Railway Procurement Agency's (RPA) annual report, which was published today.
The decline comes after strong growth in passenger numbers in each year since the launch of the Luas in June 2004.
A total of 25.4 million passenger trips were taken last year compared to 27.4 million in 2008, and 26 million in 2007.
The reduction in passenger numbers was attributed to a decline in numbers of people at work and to a drop in consumer spending in retailing and entertainment.
According to the annual report the Luas system made a pre-tax profit of €2.3 million in 2009 down from €6.5 million a year earlier.
RPA chief executive Frank Allen said that the decline in passenger numbers had continued into 2010 and warned that the agency may have to take action to contain costs.
Last year saw the opening of an extension to the red line from Busáras to The Point During 2009 work also progressed on extensions to the red and green Luas Lines to Citywest and Cherrywood. The last piece of railway track for the €300 million Cherrywood extension was welded into place earlier this month. The line is due to open to the public in October. The Citywest extension is expected to be completed next year.
Mr Allen said progress had also been made last year on Metro North, which when completed, will interchange with existing Luas lines, with the Dart and with suburban rail services.
The Dublin Metro project was given a significant boost earlier this month when the European Investment Bank announced it had approved a €500 million loan in principle.
Mr Allen said that while questions have been raised about whether Metro North should proceed, he believed the case for the project remains strong.
"The infrastructure deficit that Metro North is intended to address remains and the contribution that this project can make to economic competitiveness is more important today than when the project was first proposed," he said.
The RPA said the number of accidents involving Luas had fallen in 2009, despite the serious crash which occurred in September when a Luas tram collided with a double-decker bus on O'Connell Street. Twenty one people were injured in the crash.
According to the RPA there were a total of 23 crash incidents last year, the lowest on record.
Among last year's crashes were two which were classified as 'significant' incidents, meaning they resulted in individuals requiring a stay in hospital and/or damage to trams or infrastructure.
In 2005, the first full year of operations, there were a total of 38 crashes, of which 7 were classified as significant.
The agency also said it remained concerned about incidents of anti-social behaviour on the Luas.
Last year, Veolia, the company which operates Luas, employed extra security staff due to a rise in an increase in crime and disorderly behaviour, including pickpocketing, vandalism and begging.
