While most aviation analysts have dismissed the likelihood of an airline using highly valuable Heathrow slots to fly from a small airport such as Shannon, informed sources insist that persuading an airline to take over from Aer Lingus on the route remains "the priority".

Reports have said the Shannon Airport Authority (SAA) has held talks in recent days with BMI, BA and CityJet, although they have stressed that the discussions were still at the early stages.

There is some increased optimism in government circles that the combination of a particularly attractive package from the SAA and the fact that, unlike Aer Lingus, any new airline would not need to have a base at Shannon airport, may convince one of the airlines to operate the Heathrow route.

Government sources stress that no agreement is expected in the very near future, but they acknowledge that it would be very helpful if some alternative were in place before the Aer Lingus EGM which has been called by Ryanair and is likely to happen in October.

With Ryanair indicating that it will abstain from any vote, Aer Lingus management faces the possibility of having its decision on Shannon overturned at the EGM unless it gets the support of either the government or the employees share ownership trust (ESOT), which between them own 40% of the company.

The government is still holding firm to its line that it will not interfere in the Aer Lingus decision. If the government were to abstain at the EGM, the Aer Lingus employees . . .

including the extra shares held by staff on top of the ESOT . . .

could come close to having the votes to block the management's move on Shannon.

Transport minister Noel Dempsey will bring a memorandum to cabinet on Wednesday outlining possible options for the government in the wake of the Aer Lingus decision.

The cabinet is expected to have a long discussion on the Shannon issue. While ministers will not be able to make any major decision on how to replace the Aer Lingus service, the cabinet is expected to reaffirm the government's commitment to ensuring direct connectivity for Shannon airport.

Sources say there is a "growing acceptance" within government that connectivity is a real issue for the mid-west since the decision of Aer Lingus to withdraw from the Heathrow service.

While the priority remains finding another operator to fly to Heathrow, it is understood a 'plan B' option of a new service to another of Europe's hub airports . . . Paris or Amsterdam . . . is also being explored.

The cabinet is expected to be briefed on any initial work compiled by the high-level committee . . . made up of senior civil servants from six government departments . . . which is assessing the impact of the Aer Lingus decision and the level of existing government infrastructure in the mid-west.

The committee, chaired by the Department of Transport, met for the first time last Tuesday.

Meanwhile, pilots and Aer Lingus management are to resume crunch talks at the Labour Relations Commission (LRC) tomorrow over the company's decision unilaterally to impose reduced terms and conditions on pilots operating the company's new BelfastHeathrow route.

A media blackout has been imposed, but it is understood little progress was made at the talks last week. Ialpa, which represents the 450 pilots in Aer Lingus, deferred its two-day strike last week to allow for talks at the LRC.

While all eyes are on the pilots, cabin crew . . . who will also be required to work in Belfast on reduced terms and conditions . . . are understood to be waiting in the wings to see how the pilots get on before making a move themselves, increasing the likelihood of strike action.

The company has maintained its strong stance that it will not even discuss terms for pilots in Belfast with Ialpa. It says it cannot afford to import uncompetitive cost bases from Dublin into what is a new operating base in a different jurisdiction.

Aer Lingus says it has agreement to apply local terms and conditions for bases set up outside Ireland. It adds that it will also discuss these terms and conditions with the local representative body. This suggests it will talk to the British Airline Pilots Association (Balpa) and not Ialpa, which may be seen by the Irish union as an attempt to undermine its power base in Aer Lingus.

It is understood that some 400 people have downloaded application forms from the Aer Lingus website for the 30 pilot jobs operating from Belfast. Cabin crew jobs have also been advertised and have attracted around 1,500 downloads to date.

The pilots point out that the company cannot reasonably expect to regard Belfast, only 90 miles from Dublin, as another jurisdiction.

But the company has told the pilots that, if it transferred staff from the south to operate from Belfast, it could fall foul of Northern Ireland's rigorously applied fair employment laws.

These laws forbid any employer in Northern Ireland to discriminate on grounds of religious belief or political opinion.

It is understood the company was advised that transferring staff from the south to Belfast would be regarded as favouring Catholics over Protestants so the jobs have to be advertised locally.

Three days have been pencilled in for talks at the LRC this week . . . Monday, Thursday and Friday.