Aer Lingus sale to serve best interests of State, vows Minister

The Government will do whatever is in the best interest of all Irish airports when it comes to the sale of Aer Lingus, the Minster Jobs, Enterprise and Innovation Richard Bruton has said.

Aer Lingus is considering a third approach from rival International Consolidated Airlines Group (IAG) that values the Irish flag carrier at €2.55 a-share or €1.36 billion.

Both Aer Lingus and its suitor confirmed details of the approach in separate statements on Monday. IAG’s offer is made up of €2.50 cash and a dividend of five cent for each share.

“The board is considering the revised proposal,” the Aer Lingus statement says, but it advises shareholders to take no action.

The two companies also warn that there could be no certainty that an offer will be made.

Mr Bruton described the issues of connectivity and competition as vital for our “small island economy”.

“We are a small island economy, we need access right throughout the country we depend on it for our exports, for our tourism, so that will be a primary consideration so it will be national issues that will dominate our consideration of this issue,” he said.

When asked about the concerns for connectivity particularly in the mid west region which has fought hard for international connectivity, Mr Bruton said: “At this stage an offer has not been made so ministers and Government are constrained about what can be said.”

“I understand the [transport] Minister may be coming to Cabinet tomorrow and from the Government’s point of view the issues of connectivity of our airports will be vital as will competition in the field.”

“This is an issue which Government will look at very closely but at this point no formal offer has been made and we have to wait developments,” he added.

IAG's proposal is conditional on the Aer Lingus board recommending it and on the group receiving irrevocable acceptances from the Minister for Finance, Michael Noonan, responsible for the State's 25.1 per cent holding, and Ryanair, which owns 29.8 per cent of the Irish airline.

The board added that it was making the statement without the prior agreement or approval of IAG.

IAG, which already owns British Airways and Spanish carriers Iberia and Vueling, twice approached Aer Lingus in December proposing to offer €2.30 and €2.40 a-share.

The Irish airline’s board rejected both approaches as “fundamentally undervaluing” the company.

The group is believed to have made its latest approach last week and the Aer Lingus board considered it over the weekend before issuing its statement.

If IAG does formally offer to buy Aer Lingus it will need to win over Ryanair and the Government if it is to succeed.

The Minister for Transport, Tourism and Sport, Paschal Donohoe, has said that the coalition will consider the value and potential impact on international access of any proposal that it receives.

Ryanair chief executive, Michael O’Leary, recently told the media that his company’s board would carefully consider any offer that it receives before making a decision.

The EU Commission’s competition directorate is likely to scrutinise a takeover of Aer Lingus by IAG and could require the pair to dispose of some services to other operators before allowing to go ahead.