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Ryanair vows to increase Irish and European routes if IAG takeover of Aer Lingus goes ahead

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In 2014, Ryanair CEO Michael O'Leary landed at Dublin airport with the first of Ryanair's new Boeing 737-800 NG aircraft from Seattle. Ryanair celebrated its 30th birthday in 2015.

In 2014, Ryanair CEO Michael O'Leary landed at Dublin airport with the first of Ryanair's new Boeing 737-800 NG aircraft from Seattle. Ryanair celebrated its 30th birthday in 2015.

In 2014, Ryanair CEO Michael O'Leary landed at Dublin airport with the first of Ryanair's new Boeing 737-800 NG aircraft from Seattle. Ryanair celebrates its 30th birthday in 2015.

The terminal's eastern façade now stares down on the old arrival and departures building which is lying empty and idle. Ryanair's Michael O'Leary wanted to make it a hub for his budget carrier. But Cork Airport, or rather their Dublin Airport Authority (DAA) owners, chose to keep it moth-balled

The terminal's eastern façade now stares down on the old arrival and departures building which is lying empty and idle. Ryanair's Michael O'Leary wanted to make it a hub for his budget carrier. But Cork Airport, or rather their Dublin Airport Authority (DAA) owners, chose to keep it moth-balled

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In 2014, Ryanair CEO Michael O'Leary landed at Dublin airport with the first of Ryanair's new Boeing 737-800 NG aircraft from Seattle. Ryanair celebrated its 30th birthday in 2015.

Ryanair is likely to boost its services from Ireland if British Airways owner IAG succeeds in acquiring Aer Lingus.

And in the clearest signal yet that Ryanair won’t oppose a bid by IAG to buy Aer Lingus, Ryanair’s chief marketing officer Kenny Jacobs said that the airline “wouldn’t have any concerns” if Aer Lingus is bought out by IAG. Ryanair owns 29.8pc of Aer Lingus.

“We wouldn’t have any concerns about IAG taking on Aer Lingus,” said Mr Jacobs. “I think what we’ve shown in the past year is that we can evolve our business model in a way that we can take on Aer Lingus at any time.”

“If they acquire them, it’s a good opportunity (for Ryanair) to take more share across Europe,” added Mr Jacobs.

Mr Jacobs also predicted that IAG won’t want to take on Ryanair in Ireland using Aer Lingus, especially on pricing.

“We’re taking on Aer Lingus on short haul in Europe and clearly winning,” Mr Jacobs claimed.

“It shows what’s possible when you have a better Ryanair with the flexibility and changes that we’ve added, with more primary airports and better frequencies,” he said.

“Ryanair wins that one regardless of whether IAG takes Aer Lingus or not.”

IAG, headed by Willie Walsh, has been circling Aer Lingus since before Christmas, when it offered to buy the Irish airline for €2.30 per share. Days after Christmas, IAG increased the indicative offer to €2.40.

But both approaches have been rejected by the Aer Lingus board, which is headed by chairman Colm Barrington.

Analysts expect IAG, which also owns Spanish airlines Iberia and Vueling, will have to increase the offer to somewhere between €2.50 and €2.70 per Aer Lingus share if it’s to have a chance at succeeding in a takeover.

“We haven’t been approached yet,” said Mr Jacobs, who expects a third bid approach by IAG this week.

“We’ll consider a bid that comes to us. We’ve had our stake on the market for the past year and we haven’t had any offers. The ball is in the court of IAG.”

Mr Jacobs said he wouldn’t expect IAG to significantly reduce the scale of Aer Lingus’ operation to and from Ireland, as it has 40pc market share.

While Ryanair is awaiting the outcome of an appeal in the UK against an order instructing it to reduce its Aer Lingus stake to no more than 5pc, it could inform the UK’s Competition and Markets Authority (CMA) that it wants to sell the entire stake to IAG.

The Government, which controls 25.1pc of Aer Lingus, will be the key decider in a bid if the Aer Lingus board recommends an offer to shareholders.

At €2.60 a share, a takeover would value Aer Lingus at just under €1.39bn. Ryanair’s holding would be valued at €414m, more than the €407m it paid for it. The Government’s stake would be valued at €348m.

Irish Independent