Support for Aer Lingus buy-out 'fading'

AER LINGUS has seriously damaged its chances of getting a green light from the Government to proceed with its proposed management buy-out (MBO).

Market sources argue managements' actions by jumping the gun on the MBO, and subsequent decisions, has virtually ruled out support for a management take over of the business.

Proposals to withdraw from the airlines' One World Alliance and to end short-haul cargo services will only fuel Government antagonism further, sources said. Government is due to take a decision on the future direction of Aer Lingus when a sub-committee, under Taoiseach Bertie Ahern meets in September. It is awaiting a report from bankers Goldman Sachsbefore it makes any moves on the airline's future.