Etihad eyes airline’s near 30% stake in Aer Lingus

Gulf carrier Etihad Airways said it is interested in buying Ryanair’s near 30% stake in Aer Lingus but as yet has not entered into any talks with the airline.

Etihad, which already owns 3% of Aer Lingus, would be “very happy to have that discussion”, CEO James Hogan said yesterday.

“Dublin is a strong, profitable route for us and we’re very keen to strengthen our partnership there.”

A spokesperson for Etihad confirmed the airline was interested but said they had not approached Ryanair.

“Etihad Airways is not in talks with Ryanair regarding its stake in Aer Lingus.

“However, as stated on several occasions, Dublin is a strong and profitable route for Etihad Airways and we are very keen to strengthen our partnership there.

“If approached by Ryanair we would be happy to have a discussion about the stake, and evaluate the opportunity as we would any other commercial proposition.”

Etihad has also had talks about buying the State’s 25% Aer Lingus stake as it invests overseas to help bolster traffic through its Abu Dhabi hub.

Ryanair’s Aer Lingus bid has drawn opposition from management and politicians and sparked a review by EU regulators who blocked a similar takeover bid in 2006.

Ryanair said in its June bid statement that if Etihad or another investor acquired the State’s stake it would be willing to enter into talks about selling its holding.

However, Etihad would not be allowed buy the Ryanair stake and the State’s stake as it would take its holding in Aer Lingus above what is permitted,

Under EU regulations Non-European investors cannot hold majority stakes in EU carriers because of global aviation agreements.

Etihad has invested in Air Berlin, Virgin Australia, and Air Seychelles, as well as striking about 36 code-share agreements. Talks on code- sharing with Air France- KLM are also under way, Mr Hogan said.

Etihad is interested in few other airlines and has ruled out “mega-carriers” and airlines based in North and South America, he said.

In July, Etihad signed a code-sharing agreement with Aer Lingus, allowing it to sell tickets on the Irish company’s flights.

Transport Minister Leo Varadkar said on May 1 the Gulf carrier’s involvement was a “good thing”.

Ryanair has offered to buy out other Aer Lingus investors in a deal valuing the smaller carrier at €694m. Aer Lingus has rejected the proposal, saying the EU will probably veto it on competition grounds.

UK regulators are separately investigating Ryanair’s existing Aer Lingus stake and its impact on the travel market.

— Additional reporting Bloomberg