Aer Lingus ‘too small to remain independent’

RYANAIR said Aer Lingus is too small to remain independent, saying it has neither scale nor the route network.

It also said Aer Lingus is “overly dependent” on a deteriorating Irish economy.

“We strongly believe that Ryanair is the best, if only, secure future for Aer Lingus,” Ryanair chief executive Michael O’Leary said following the publication of Ryanair’s offer document yesterday.

Ryanair said Aer Lingus rejected its 2006 offer of €2.80 as “derisory”, but added that Aer Lingus shares fell 65% from the €2.80 bid level to less than €1 in November 2008, causing a value loss of €960m for shareholders.

Aer Lingus share price closed at €1.44 yesterday.

“Aer Lingus is a small regional European airline which, because of its size and peripherality, Ryanair believes, is unlikely to be of interest or relevance to the other three major European airline groups,” the offer document read.

Ryanair also said that if its offer is not successful it believes that the shareholders and other stakeholders in Aer Lingus face “significant uncertainty” with regard to the future operating, financial and share price performance of Aer Lingus as a small independent airline.

“The airline sector is under unprecedented pressure as a result of a deepening economic recession,” it said.

Mr O’Leary also reiterated that Aer Lingus workers would get €137m if the takeover went ahead, while the Government would get €188m.

Ryanair, which already owns almost 30% of Aer Lingus, said in the offer document that otherinvestors should vote in favour of a creation of a united Irish airline by January 5.