Financial incentives to encourage airlines to fly from Dublin to regional airports in Galway, Knock, Sligo and Derry are to be cut from July.

Following a review of regional airport expenditure, Transport Minister Noel Dempsey has decided that so-called Public Service Obligation routes will only remain on Dublin-Kerry and Dublin-Donegal routes.

The minister cited improvements in road and rail transport and the need for best value for department funds as reasons for the decision.

He said the routes to Dublin from the affected airports will be open to commercial air services once the PSOs are terminated.