Aer Lingus sale hinges on Ryanair intent

Reports suggested Government did not want to move until it knew Ryanair’s position

The Government was expected to have decided by now on whether  to sell the State’s holding in Aer Lingus to IAG

The Government was expected to have decided by now on whether to sell the State’s holding in Aer Lingus to IAG

 

At least some in Government seem keen to push the idea that a decision on the sale of the State’s 25.1 per cent stake in Aer Lingus will somehow hinge on what Ryanair wants to do with its 29.8 per cent holding in the airline.

The Government was expected to have decided by now on whether or not to sell the State’s holding in Aer Lingus to International Consolidated Airlines’ Group (IAG), which is willing to pay €1.36 billion for the carrier.

An expert group, which was handling the talks with IAG, is said to have completed its work, or to be close to doing so. So this simply boils down to the cabinet saying yes or no. However, reports at the weekend suggested that the Government did not want to move until it knew Ryanair’s position.

Tánaiste Joan Burton appeared to endorse this, saying: “Remember, it is not just the Government which is involved in this. There is a significant stake held by Ryanair and how they approach that will be very significant in any decision being made.”

A senior member of the Government appears to be saying that the views of the one company that it does not want to take over Aer Lingus will be instrumental in its own decision relating to the State’s holding in the airline.

Given the fractious relationship that Ryanair has had with the State and its agencies down through the years, it is unlikely that the Government wields any influence over it, in relation to Aer Lingus or anything else.

In any case, if an offer materialises, Ryanair’s board will have to decide what is in its best interests. If it does decide to sell, it will then have to get permission from the UK Competition and Markets’ Authority, another organisation over which the Government has no influence, before doing so.

Apart from any of that, the Government’s decision should be based solely on what it believes to be in the best interests of the citizens, for whose benefit it holds the shares, and the State as a whole, not on what another shareholder might, or might not, do.

Speculating about Ryanair’s intentions is merely muddying the waters. It suggests that the Government fears the consequences of any decision and is thus looking to deflect some of the attention on the issue away from itself.