Aer Rianta's return on capital investment should be fixed at 4 per cent for the next five years and not 9 per cent as the aviation regulator, Mr Bill Prasifka, has proposed, Mr Michael O'Leary, Ryanair's chief executive, said yesterday.

At a public hearing held by the Commission for Aviation Regulation in Dublin, Mr O'Leary said Dublin Airport's proposed charges, instead of being increased, should be reduced by 30 per cent, because the airport was proved to be 30 per cent less efficient than its peers.

He told Mr Prasifka that the development of a six-bay extension to Dublin Airport was "scandalous" and the cost could have been halved by putting a baggage hall at the same ground level.

Aer Rianta had used a regulatory vacuum to "gouge everybody at the airport", he said. "Dublin is ridiculously expensive. Traffic is stagnant and services and routes are being reduced on a daily basis. Dissatisfaction with Aer Rianta by the users is widespread."

Regulation had always failed in this country, he added. "Regulation is no substitute for competition. Nobody gives a toss what our costs are going to be. What the competition does is addresses the needs of users. The onus is on this Commission to go beyond the spirit of the legislation and ensure it really works."

After the hearing, Mr Prasifka said of Mr O'Leary: "I regard him highly and always listen to what he has to say. He makes his points very robustly and we will be considering carefully all the points."