Wednesday 22 January 2020

JetBlue silent on reports it wants to buy State's stake in Aer Lingus

Getty Images
Getty Images
John Mulligan

John Mulligan

US airline JetBlue has refused to comment on reports its senior management team held talks with Aer Lingus counterparts about buying the Government's 25pc stake in the airline.

Speculation that the two management teams held talks about the stake comes just two weeks after Aer Lingus chief executive Christoph Mueller said that while there was more potential to extract additional benefits from its existing JetBlue relationship, there was no specific significant announcement planned.

While the Government has said it will sell its 25.1pc stake in Aer Lingus, it hasn't formally put the holding up for sale and has not yet hired any advisers to assist it in doing so. Transport Minister Leo Varadkar sought to dismiss a link with JetBlue yesterday, saying that he was not aware of any plans to sell the Aer Lingus stake to the American carrier.

He also suggested that JetBlue, which operates nearly 170 aircraft, might not have sufficient free cash to buy the Government's stake, which is currently valued at about €120m.

However, JetBlue's recently published annual report for 2011, notes that it had cash and cash equivalents of $673m (€512m) at the end of last December, plus short-term investments of $553m.

A JetBlue spokesman said yesterday that the airline does not comment on market rumours or speculation. An Aer Lingus spokesman also declined to comment yesterday.

JetBlue chief executive David Barger was due to join Aer Lingus chief executive Christoph Mueller at an industry lunch in Dublin last week, but was unable to attend.

However, a senior Aer Lingus executive had downplayed the importance of Mr Barger's anticipated attendance at the event.

Abu Dhabi-based airline Etihad has also been touted as a potential buyer of the Government's stake in Aer Lingus.

The carrier's chief executive, James Hogan, has said he'd be willing to discuss the holding with the Government once it was formally put up for sale. It has also been speculated that Qatar Airways could be interested in Aer Lingus.

The Government has already indicated that it wants to secure a dividend payment from Aer Lingus prior to a sale, while it also wants to ensure the price received for its stake is at least €1 per share.

Under Mr Mueller's employment contract, he's due to have 500,000 share options in Aer Lingus become exercisable on September 7 this year, as long as the share price hits €1 for five days in a row prior to that date.

A sale of the Government's stake will have to wait until talks to address a major crisis at a pension scheme that serves thousands of current and former Aer Lingus workers are concluded. Those talks are likely to run into the second part of the year.

Irish Independent

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