Government committee to study report on Aer Lingus investment options

THE Government has received the report of investment bank Goldman Sachs outlining its options for seeking outside investment for Aer Lingus.

The bank has been looking at proposals for injecting cash into the publicly-owned airline since its chief executive approached the Government about a management buy-out in June.

The report will be studied by a Cabinet subcommittee made up of the Taoiseach, Tánaiste and Ministers for Transport, Tourism and Finance in the coming weeks.

They are expected to decide later this month whether to allow an outright investor to take a stake in the airline or sell it off entirely.

The consultants were appointed following an approach to Transport

Minister Séamus Brennan from Aer Lingus chief executive Willie Walsh, who asked permission to lead a management buy-out of the airline.

Several potential bidders for all or part of the national carrier have been mentioned. There were reports yesterday that the Cavan-based businessman Sean Quinn was interested in investing in Aer Lingus.

Mr Quinn is one of Ireland’s wealthiest businessmen, with interests ranging from the insurance market to hotels and the manufacturing sector.

Other possible investors were rumoured to be British Airways and the private equity firms 3i, Candover and Cinven. Mr Brennan said yesterday: “The first decision we must make is what is right for the airline, whether it is right to take in extra investment to permit it to invest in new aircraft and so on.

“Or whether it is appropriate that full measure or some measure of State involvement should continue.”

Aer Lingus is in the middle of a new three-year business plan that will see the carrier transform itself into a low fares airline like Ryanair.

It plans to slash 1,300 jobs and remove business class seats from its short-haul flights.

Today is the deadline for Aer Lingus employees to accept the voluntary redundancy package. The airline is not expected to say for some days how many staff have opted for the deal, which would leave employees with a minimum payout of €40,000.

There are no figures on the value of Aer Lingus, but aviation industry experts say it could be worth around €600 million. It is expected to make €95m in profits this year.