The Aer Lingus chief executive, Mr Willie Walsh, has said the company will still pursue the 1,325 redundancies in its attempts to drive down the cost of tickets and to further reduce costs.
Mr Walsh made his comments after he had withdrawn the management buyout of the airline.
Although Mr Walsh acknowledged that any investment proposal promoted by management was off the agenda, he insisted the airline's normal activities would continue.
He said the company was still seeking 1,325 redundancies and it is believed about 800 staff have already indicated their interest in a severance scheme. He said fares would continue to be driven down and costs would be further reduced until Aer Lingus was in line with competitors such as Ryanair.
A public disagreement has emerged between the Taoiseach, Mr Ahern, and the Tánaiste, Ms Harney, after Ms Harney insisted yesteday that all options for the future of the airline should be kept open, only hours after the Taoiseach dismissed a management buyout proposal as "inappropriate."