The Dublin Airport Authority (DAA) last night slammed as "unsustainable" Ryanair's demands, including an unprecedented payment per passenger, to deliver one million passengers to loss-making Shannon Airport.
In addition to a passenger payment totalling €2m, the airline admitted last night that it has also demanded the return of a €3.7m legal settlement that it paid the DAA less than six weeks ago for failing to honour the commitments of its previous five-year agreement at Shannon.
Shannon Airport is last year understood to have made losses of €8m and figures this week showed traffic at the airport was down by 37.4pc in January compared with the same month last year.
The withdrawal of a large number of Ryanair services at the end of their five-year deal last year is understood to account for 90pc of the decline.
Yesterday, Ryanair boss Michael O'Leary set out the terms of the latest deal he put to the DAA in a letter and confirmed that the airline had sought the €3.7m legal settlement to be returned to it from the DAA.
He compared his proposition to the "growth incentive scheme" currently enjoyed by Aer Lingus at Dublin Airport and asked that the DAA pay his airline €4 per departing passenger.
Mr O'Leary said the scheme would last on a declining scale over a five-year period. He said Shannon was currently in freefall. "It is facing traffic collapse. Ryanair is the obvious and only way that this traffic collapse at Shannon can be reversed," he said.
In response, the DAA ridiculed Ryanair's suggestions that it was merely asking for the same terms that Aer Lingus receives at Dublin Airport.
"Ryanair's claim of earlier today that the terms it has sought are the same as those currently available to Aer Lingus in Dublin is completely untrue," a DAA spokesman said.
"As a commercial organisation, the DAA does not pay any airlines for the delivery of passengers and is unaware of any airport that operates in this manner. Such a notion would be economically unviable for any airport," the DAA said.
The Ryanair boss said if his proposition to the DAA was to be availed of, it would also have to be offered to his competitors.