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Aer Lingus sale to IAG now hinges on Ryanair


A strike could cause chaos for Aer Lingus on St Patrick's weekend. Photographer: Tim Boyle/Bloomberg

A strike could cause chaos for Aer Lingus on St Patrick's weekend. Photographer: Tim Boyle/Bloomberg

A strike could cause chaos for Aer Lingus on St Patrick's weekend. Photographer: Tim Boyle/Bloomberg

Ryanair's intentions for its stake in Aer Lingus will have to be declared before a Cabinet decision on the sale of the airline can be made.

Senior Government sources last night confirmed that the Cabinet will only be given a chance to decide on the State's 25.1pc stake in the former national carrier once Ryanair makes known its intentions.

A decision to sell the State's holding in the airline has still not been reached, six months after British group IAG made its first bid.

Speaking yesterday, Tánaiste Joan Burton said: "Clearly, there are ongoing issues in relation to Ryanair and the approach that they take."

When pressed as to why there has been such a delay, she said the role of Ryanair is a complicating factor and clarity is needed. "Remember, it is not just the Government which is involved in this. There is a significant stake held by Ryanair and how they approach that will be very significant in any decision being made."

Ryanair owns 29.8pc of its rival carrier. It has been ordered by the UK's competition watchdog to reduce this to 5pc, a decision it has appealed repeatedly. Boss Michael O'Leary has said he will sue the Competition and Markets Authority for damages if it does not reverse the ruling. The value of the investment has been damaged by the decision, he added.

Despite this, the company has not indicated whether it would accept or reject an offer for the stake from IAG. No formal offer has been made yet. "The board of Ryanair will consider any offer on its merits, if and when an offer is made," a Ryanair spokesperson said.

Despite Labour concerns around the deal, the Government appears to be in favour of selling the State's stake. Transport Minister Paschal Donohoe had said as far back as March that he wished the deal to be completed one way or the other in a matter of weeks.

But the subject will not be on the Cabinet agenda for this week's meeting. Speaking yesterday, Mr Donohoe's spokeswoman said he has yet to receive a "final report" from the Interdepartmental Group examining the matter.

A Labour party spokesman last night said concerns over connectivity and outsourcing need to be addressed comprehensively for it to back the deal.

Michael O'Leary told the Irish Independent earlier this year that Ryanair had not ruled out making its own fourth bid for Aer Lingus. "The sequence would be: if there's a formal offer for our shares in Aer Lingus, the board of Ryanair would have to sit down and consider whether we accept or don't accept it. One of the things that we will consider is: do we want to sell our stake in Aer Lingus or do we want to put in a competing bid and launch a fourth offer? It is one of the considerations. Do we want to do that - I don't know. But it is one of the options that the board of Ryanair should consider, but only if there is a formal offer for Aer Lingus tabled by some other party."

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