Minister for Transport Martin Cullen has said that he believes that it would be reasonable for Cork Airport to accept responsibility for €100m of its debt burden, but has ruled out higher airport charges to fund the debt.
Earlier, Progressive Democrat Senator John Minihan said the row over who would pay the €220m debt at Cork Airport could cost the Government parties votes in this year's general election.
It is understood the Government is suggesting that the Dublin Airport Authority retain €120m of the debt, and Cork Airport Authority take on the remainder.
When plans to break up Aer Rianta were announced, Cork Airport was promised it would commence business debt free.
Speaking at the launch of a new road safety programme for learner drivers, Minister Cullen said that if Cork Airport wanted to achieve independent status ahead of the original timeframe, it would have to take on board less than 50% of its debt.
He said that if Cork did not want to take on the debt, that was fine by him. Minister Cullen said it was up to Cork Airport management to decide if it wanted to move ahead rapidly, and carry less than 50% of its debt - or wait until Dublin had enough cash reserves to release Cork as an independent entity.
But he warned that that could take some considerable time - given that Dublin Airport has to take on debts of more than €1 billion to develop its own infrastructure.
He said it was not true that airport charges would have to be increased to fund the debt because there was a strong viable commercial position available to Cork Airport.
He described the portion of the debt Cork would take on as reasonable when measured against the asset base. He said he wanted to remind everyone that as far back as 2004, the former transport minister Séamus Brennan had set out clearly that a 'finance lease arrangement' on a portion of Cork's debt would have to be arranged between Dublin and Cork.
Asked about what would happen to the proceeds of the sale of a land bank at Cork, he said Cork Airport would retain all assets at Cork.
Asked about industrial relations difficulties at Shannon, he said he was concerned that the cost base in Shannon was not viable and must be addressed. He said he hoped all parties could go back to the Labour Relations Commission and come out with a solution.
He also said that Ireland reserved the right to negotiate a bilateral open skies agreement with the US if collective negotiations at EU level failed to deliver a deal.
