O'Leary open to selling Aer Lingus stake to rival
Published 20/10/2010 | 05:00
Ryanair chief executive Michael O'Leary has again ruled out mounting a third bid for Aer Lingus, but conceded that he would be willing to sit down with any rival interested in buying the airline if it wanted to acquire Ryanair's near 30pc stake in the carrier.
Speaking to the Irish Independent from Oslo yesterday, Mr O'Leary said that, despite comments he made to a German newspaper this week, he was not contemplating any fresh assault on Aer Lingus.
However, he said he believed that the State's 25pc stake in Aer Lingus would be among the first to be sold if the Government got around to auctioning off assets. He added that the Government had "failed to deal with reality" concerning the current fiscal position.
"One of the consequences of this in the next two to three years will be the sale of state assets. The Government has run out of options," he said.
The Government has already appointed a review committee to examine which state-owned assets could be sold in order to reduce the bulging budget deficit.
Mr O'Leary admitted that the Government would be "highly unlikely" to sell its stake in Aer Lingus to Ryanair, but he said he believed it would have to be sold to another airline soon. He added that he would have no problem selling Ryanair's stake to a rival interested in bidding for Aer Lingus in its entirety.
"We would look at every situation on its merits," he said.
Mr O'Leary also said that if Ryanair did manage to buy Aer Lingus it would look at boosting the number of aircraft to 60, and competing with Easyjet at locations such as Charles de Gaulle airport in Paris. Ryanair has twice tried to acquire Aer Lingus via failed hostile bids that were rebuffed by the Government, while the European Court of Justice earlier this year upheld a previous ruling from the European Commission that a takeover of Aer Lingus by Ryanair would impede competition on a number of routes.
The court also dismissed an appeal by Aer Lingus to force Ryanair to sell its stake in the former state-owned airline.
Mr O'Leary also told the Irish Independent yesterday that post-2012 Ryanair was likely to increasingly focus on marketing its customer service rather than advertisements offering seat sales.
He said that without new aircraft, passenger growth was likely to eventually slow to between 2pc-3pc per annum.
He also claimed that Aer Lingus was likely to be seeing its yields being "trashed" as Ryanair increasingly competed with the carrier more directly, via main airports such as Barcelona El Prat.
However, Aer Lingus recently revealed in a trading statement that yields had improved significantly across the airline in September and that it could post a full profit at the "top end" of forecasts.