The Government is considering retaining more than 25 per cent of Aer Lingus following flotation to prevent its position being diluted by further private investors.
The Cabinet is expected to approve a flotation of the State-owned airline today, although Siptu, the largest union at the airline, has threatened to strike unless it gets undertakings on job security and other issues.
The actual sale may not take place until September. The timing is expected to be left to corporate advisers.
During talks at the Department of Transport yesterday with trade union representatives, officials agreed that even a 25 per cent stake might not be sufficient to safeguard the Government's influence over the company.
The Government may instead opt to hold a stake of over 30 per cent so that in the event of future share sales its position will not fall below 25 per cent.
This is often described as a "golden share" because it would allow the Government to block a complete takeover of the company. Under company law a complete takeover offer can only succeed if it attracts support from over 80 per cent of the shares.
While the flotation of the company will provide the airline with significant fresh funding, possibly for several years, additional capital will be needed at some point.
In that event the Government would be asked to invest in the airline. If it decided not to, its stake would be diluted and private investors would become more dominant. The Government is concerned this might undermine its plan to protect landing slots at Heathrow Airport.
Because of these concerns the Government may retain a bigger stake than 25 per cent and build what is described as "headroom" into its shareholding. This means that even if additional shareholders came on board, the Government would still have a 25 per cent stake.
Following a meeting yesterday with Minister for Transport Martin Cullen, Siptu national industrial secretary Michael Halpenny said he was disappointed with the Government's apparent willingness to take such an important decision at this time.
He said a range of issues, pensions, job security and outsourcing, were still not resolved and an Oireachtas committee was preparing to hold hearings into the sale. "It seems strange to us, to say the least, that the Government is proceeding with such haste to make a decision in advance of such consideration," he said.
Siptu wants to know the kind of job numbers there will be at the airline, including the balance between permanent and casual staff. The union also wanted a commitment that there would be no compulsory redundancies under new owners.
Impact, the other union at the airline, was more optimistic about the meeting. It has not rejected the idea of a sale but wants five conditions to be met.