Ryanair has offered to sell Aer Lingus landing slots at London's Heathrow airport in a bid to win European Commission approval for a takeover of the carrier, sources said.
The European Commission has until July 4th to decide on Ryanair's unsolicited offer, which originally valued Aer Lingus at €1.48 billion.
The European Union competition regulator has rejected previous proposed solutions as insufficient to overcome competitive problems with the deal.
The commission said in March in a confidential statement of objections that Ryanair would gain unacceptable dominance at Dublin airport with an overwhelming majority of slots.
But Ryanair has now offered to sell Aer Lingus slots at Dublin airport and Heathrow for flights between the two airports, the sources said. The slots would be sold to British Airways and to Air France's Cityjet, which flies from Dublin, they said.
The proposal is among Ryanair's new package of remedies, the sources said. They did not disclose the other proposed concessions.
However, experts said Aer Lingus shareholders who object to the merger would likely object to the divestitures - particularly the Government, which has called the slots a strategic asset.
The Government holds 25 per cent of the shares and with airline employees, who hold an additional share, would be in a position to block such divestitures.
Ryanair has withdrawn its bid for Aer Lingus pending the European Commission decision. But Ryanair Chief Executive Michael O'Leary said last week the company would consider a second bid for Aer Lingus if Ryanair received a favourable outcome from the EU review and the Irish takeover panel.