Government not selling stake to Ryanair

The Government has rejected Ryanair’s €694m bid for its stake in Aer Lingus, saying the terms of the offer contain no benefits to Ireland.

While opposed to selling to Ryanair, Transport Minister Leo Varadkar said yesterday the Government remained committed to disposing of its 25% stake in Aer Lingus, but only “at the right time, under the right conditions”.

However, he said, the Government could not support Ryanair’s “remedies package” for the deal, on the grounds of it not being in the best interest of competition, connectivity and employment.

The minister said the Government would appoint sales advisers regarding its Aer Lingus shareholding in the new year but there was no rush to dispose of the stake.

Mr Varadkar said that the Government would inform the European Commission of its concerns. The EC is expected to rule on Ryanair’s latest Aer Lingus bid next month.

“Obviously, the European Commission will make its own decision in its own time, but we do not see any benefit to Ireland in what has been reported,” Mr Varadkar said.

In response, Ryanair — which currently owns just shy of 30% of Aer Lingus — noted that the Government had no power to block its offer, which it added “can still be successfully completed if we acquire a shareholding of 50% or more”.

Ryanair reiterated that the remedies package it submitted to the EC would increase competition, choice, traffic and jobs “to and from the island of Ireland”.

It was reported, earlier this week, that Ryanair, if successful in its bid, would sell off Aer Lingus’s Heathrow Airport slots, worth around €400m, to British Airways owner, IAG. A non-binding memorandum of understanding between the two airlines has been signed. But the fear is that IAG could use the slots to service other non-Irish routes.

The Irish Hotels Federation referred to the Heathrow slots as being of “critical strategic importance” to the country.

Selling them to a foreign airline could leave Ireland without any connections to Europe’s largest traffic hub, IHF president Michael Vaughan said.