Brennan works to secure aid for Shannon region

The Minister for Transport, Mr Brennan, has said it is "almost inevitable" that the European Commission will gain a mandate to negotiate aviation rights with the United States on behalf of the EU as a whole.

He acknowledged that such a move could threaten the future of the Shannon stopover and indicated that he would accept a promise of more EU aid for the Shannon region in return for lifting Ireland's objection to the plan.

"The bottom line is, before I agree to any package, I need to be reassured that I have a deal on Shannon's future," he said.

Speaking after a meeting of EU transport ministers in Brussels, Mr Brennan said that the stopover could not form the basis for Shannon's long-term future. He expressed interest in a suggestion by EU Transport Commissioner Ms Loyola De Palacio that the Shannon region could receive special recognition from the Commission if the stopover was abandoned.

"That is a real option. Given that the package appears to have the support of all delegations, my job is to get the best out of it for Shannon," he said.

Mr Brennan said that an EU-US open-skies agreement would be good for Ireland because it would open more destinations in the US for Irish carriers. At present, Aer Lingus is only allowed to fly into New York, Chicago, Los Angeles, Boston and Baltimore.

The US authorities have, until now, refused to expand the number of destinations available to Irish airlines, partly because of the requirement that transatlantic flights to Ireland should stop at Shannon. Mr Brennan hinted that he might be willing to abandon the Shannon stopover even without an EU-US open skies agreement.

"It may be that we calculate that we can get more business by not having the stopover. If we got extra gateways and extra business, you'd be silly not to consider it," he said.

The EU hopes to agree on the open-skies arrangement by June but Mr Brennan suggested that such a timetable may be over-ambitious.

The ministers discussed the impact of war in Iraq on the aviation industry and agreed that airlines could suffer as a result of the conflict.

But they rejected the prospect of state aid to airlines facing difficulties due to the war and agreed that the industry should bear the extra cost of security during the conflict.

"We are not going back down the road of aiding airlines that are in trouble," Mr Brennan said.

The EU will consider imposing tariffs on US airlines if Washington offers aid to its carriers during the war and the ministers did not rule out helping airlines if insurance companies withdraw cover.

Earlier, the ministers agreed to open the European rail freight industry to competition.

International freight routes must be liberalised by 2006 and national freight routes by 2008. Mr Brennan said the Government could open Ireland's rail freight industry to competition before those dates.