AER LINGUS’S share price soared by 11.7 per cent in Dublin yesterday following reports that Abu Dhabi-based airline Etihad has expressed an interest in acquiring the Government’s 25 per cent stake in the airline.
It is understood that Etihad logged its interest in Aer Lingus during meetings held at the time of the Global Economic Forum in Dublin Castle earlier this month.
Etihad chief executive James Hogan attended the forum and held separate, private meetings with Taoiseach Enda Kenny and Minister for Transport Leo Varadkar.
Mr Hogan also used the visit as to announce Etihad’s intention to hire more than 100 cabin crew from Ireland.
Etihad, which is owned by the royal family in Abu Dhabi, declined to comment on the Aer Lingus issue yesterday, which was reported by the Financial Times.
“We never comment on speculation of this nature, except to say that we talk regularly and frequently to many airlines and a range of other businesses from all over the world about issues and opportunities,” the airline said.
In a statement, a spokesman for the Department of Transport said: “Since the Minister indicated that he would be willing to sell the residual stake in Aer Lingus, there has been considerable interest both from other airlines and from [private] investors.”
Aer Lingus declined to comment, saying it was a matter for the Government, as the owner of the shares.
Industry sources indicated that Ryanair was “surprised” by Etihad’s move. It is understood that the Abu Dhabi airline has not approached Ryanair about its 29.8 per cent stake in Aer Lingus.
Etihad’s approach follows Mr Varadkar’s recent statement that the Government would be willing to sell its stake in Aer Lingus under certain conditions. This included securing the right price for the shares and getting certain commitments on the use of its Heathrow slots.
Ryanair chief executive Michael O’Leary also said it would consider selling its stake.
Etihad’s primary interest in Aer Lingus might be its 23 slot pairs at Heathrow in London. Only British Airways and BMI/Lufthansa have more.
Etihad is interested in targeting the transatlantic market from Heathrow under the Open Skies agreement between Europe and the US. But it is precluded from doing so as it is not European owned.
It has already been linked with British airline BMI, which is set to be offloaded by German airline Lufthansa.
Under EU rules, Etihad would not be allowed to own Aer Lingus. Buying the Government’s stake would not breach this rule.
However, given that the combined government and Ryanair holding comes to just under 55 per cent, Etihad would either have to sell on some of the shares or partner a European group to buy the stock if it bought both stakes.
Etihad began flying from Dublin to Abu Dhabi in July 2007 and operates 10 flights a week.
It spent more than $2 million on a premium lounge at Dublin airport and also has a line maintenance facility here.