Ryanair chief executive Michael O'Leary warned today the airline plans sweeping job cuts at Aer Lingus if it succeeds in its takeover bid.
"There is no doubt in my mind there would be significant job losses in Aer Lingus if the Ryanair bid is successful because that is one of the ways where we expect to reduce costs," Mr O'Leary told a news conference this afternoon.
In a statement outlining the details of the offer document, which shareholders will be sent on Monday, Ryanair also moved to allay fears of members of Aer Lingus's share ownership scheme that they would face a huge tax bill if they accepted the offer.
Ryanair also said the Aer Lingus share price, which has been boosted by the offer, could fall significantly if its bid failed.
Ryanair made its surprise bid for Aer Lingus two weeks ago at €2.80 a share, valuing the airline at €1.48 billion - a 27 percent premium to Aer Lingus's flotation price of just a week earlier.
Aer Lingus shares were trading around €2.86 today.
"Ryanair believes that the consequences of its bid failing will be that Aer Lingus employees will hold a substantial minority shareholding, the value of which will have fallen significantly, in an illiquid company," the company said.
It said members of the Employee Share Ownership Trust (ESOT), which owns 9.6 per cent with an option on a further 2.9 per cent, should be able to avoid paying a hefty tax bill on the sale of shares in Aer Lingus by reinvesting in Ryanair.
The Government, Aer Lingus's largest shareholder with a 28 per cent stake, has already said it will not sell its shares, and the company's board and unions also oppose the offer, which they say would create an airline monopoly in the Republic.
However, Ryanair has consistently disputed this. "Ryanair's offer commits to maintaining Aer Lingus as a stand-alone separate airline," it said today.
"Because the two airlines will compete vigorously, this will not lead to a monopoly. In any event, the question of a monopoly does not arise as there are 50 other scheduled airlines competing with Ryanair and/or Aer Lingus at Dublin Airport."