Analysis: Ciarán Hancocklooks ahead to the possible outcomes of an Aer Lingus egm over the Shannon issue
Ryanair's decision to call an extraordinary general meeting (egm) of Aer Lingus in an attempt to force it to reverse the decision to axe the Shannon-Heathrow route has made life extremely difficult for Dermot Mannion and the Government.
If Mr Mannion fails to defeat the motion, then his position as chief executive of Aer Lingus would probably be untenable.
A simple majority of shareholders who vote at the egm will carry the motion. With 29.44 per cent of the shares, Ryanair is Aer Lingus's biggest investor and is well set to win any vote. Presuming that all shareholders vote, which rarely happens with a public company, Michael O'Leary would need to garner the support of another 20.6 per cent of investors. The other large investors in Aer Lingus are the Government with 25.3 per cent and Esot, the Employee Share Ownership Trust, which owns 12.6 per cent.
Mr O'Leary has offered to abstain in the vote over Shannon-Heathrow, a move that would make it easier for the Government and the Esot, who both objected to Ryanair's proposed takeover of Aer Lingus, to combine to force Mr Mannion to reverse his decision.
Having indicated that it will not meddle in the airline's affairs, it seems unlikely that the Government would vote to force Aer Lingus to reverse its decision on axing Shannon-Heathrow. Likewise, it is hard to imagine the Government voting against the Ryanair motion - a move that would be seen as a slap in the face for the midwest.
The Government's third option is to abstain. It is not clear how Ryanair would respond to such a move. If the Government was out of the equation in voting terms, Ryanair would require just 37.35 per cent of the remaining 74.7 per cent of the shares in the pot.
In that situation, a combination of Ryanair and Esot could force Aer Lingus into an embarrassing climbdown. Esot is keeping its cards close to its chest. Sources suggest that it will ballot its members at the airline for direction on which way it should vote.
In the meantime, Mr Mannion will be furiously lobbying other shareholders to win their support.
Bank of Ireland Asset Management owns 3.5 per cent; entrepreneur Denis O'Brien has 2.3 per cent and JP Morgan Asset Management has 2.4 per cent. Tailwinds, a loose grouping of pilots, owns about 2 per cent while the pilots' pension fund owns about 2.2 per cent. The Aer Lingus board has until September 4th to give a date for the shareholders' meeting and until October 12th to hold the egm.