The decision removes, temporarily at least, the risk of increased costs for the borrowing that will be needed for the DAA's planned overhaul of Dublin Airport. The DAA has a statutory borrowing limit of 700m, and current borrowings are around 400m, but it has proposed a 1.2bn investment plan for Dublin.

In October, S&P placed the DAA's ratings on CreditWatch "with negative implications", after the decision by former aviation regulator Bill Prasifka to allow maximum airport charges to increase by 23%, rather than the 50% sought by the DAA to recover part of its planned investment.

Last week, S&P affirmed its 'A' long-term and 'A-1' short-term credit ratings on the airport operator, as well as its 'A' long-term senior unsecured debt rating on DAA Finance's 250m bond issue guaranteed by the DAA.

"A final determination by the Irish regulator on airport charges for the period 20062009 could take longer than initially planned, owing to the impending Aviation Appeal Panel process and the possibility of a further review, " said S&P credit analyst Maria Lemos. "In light of this, a downgrade in the near term is no longer probable, although concerns over DAA's medium and long-term credit quality remain."

The outcome of the appeal process, whether the new regulator reviews the DAA's plan, and whether the regulator revisits Prasifka's decision on airport charges will be key to the DAA's financial profile and rating over the next five years. S&P expects the company's long-term rating to range between 'A' and 'BBB+'.

It noted that the spin-off of Cork and Shannon is taking longer than earlier expected. Delays in producing business plans for the regional airports have been prolonged by ongoing wrangling over who should carry Cork airport's debt, and over a voluntary severance plan for Shannon employees currently before the Labour Court.

Last week, a facilitation process was announced to try to resolve the Cork impasse.