Plans by Aer Rianta to invest almost £1 billion at its airports in Dublin, Cork and Shannon were rejected yesterday by the regulator who sets airport charges.
Mr Bill Prasifka accused the State company of constructing inefficient facilities and reduced the average landing fee at Dublin Airport to £4.41 per passenger from £4.65.
Expenditure of only £272 million could be justified in a capital programme worth £998 million, he said.
Mr Prasifka's determination on landing fees means that proposed capital expenditure of £726 million will not be recoverable against the fees charged to airlines. This casts doubt on the plan, which was designed to pave the way for a partial flotation on the stock exchange.
Aer Rianta's spokesman declined to comment, but it understood senior figures in the company were disappointed with the outcome of the regulator's review.
Mr Prasifka sanctioned Aer Rianta to impose increases up to an average £5.29 per passenger from £4.65 in Cork and Shannon. In that the determination allows for annual reductions on these rates from September 2002, the regulator wants Aer Rianta to become more efficient.
But Mr Prasifka said airlines were unlikely to pass the decreases on to their customers. He had no power to regulate ticket prices.
The determination differed radically from a draft published in June, which proposed large increases in landing charges.
It was opposed by the Department of Tourism and Sport and by airlines such as Aer Lingus and Ryanair, which accused Aer Rianta of seeking to "goldplate" its airports.
Ryanair, the airline most vocal in opposing what it alleged were high tariffs, last night criticised Mr Prasifka's determination. "We regret that the regulator has not imposed more radical efficiency targets or price reductions," it said.
Mr Prasifka's determination took account of a direction from the Minister for Public Enterprise, Ms O'Rourke, who said airport policy was crucial to the Government's objective of balanced regional development. But Mr Prasifka said this had no bearing on the independence of his office.
Of the Aer Rianta capital expenditure programme, he said the company had "poor consultation" with users of its airports. There was also lack of transparency in the quality of information the company provided, particularly as to the costs of the proposed projects.
The company had cited commercial sensitivity when refusing to provide certain information about the projects.
Its construction of past and planned facilities was inefficient, and financial analysis of the benefits from the expenditure was "inadequate or non-existent".
