Aer Lingus flotation to go ahead despite opposition

The Irish government today announced its intention to float state airline, Aer Lingus, on the Dublin and London stock exchanges.

Ministers pushed ahead with the plans despite continued opposition to the move by the country’s largest trade union, Siptu, which represents almost 2,000 staff at the company.

The shares, primarily targeted at institutional investors, will be available for a minimum investment of €10,000 and are expected to go on sale in late September.

Money raised by the flotation will be used to finance the expansion of the airline’s fleet, while a one-off pension contribution will also be made.

The Irish government will retain a significant minority shareholding of at least 25.1% in Aer Lingus in a bid to safeguard its strategic interests, such as prized slots at Heathrow Airport.

More than 50% of the airline’s issued share capital will remain in the hands of Irish shareholders following the sale, including the government, employees and private investors.

Minister for Transport Martin Cullen said he was delighted to reach this important milestone for the company.

“This is the right decision for the company, its employees, customers and Ireland and it is taking place in order to give Aer Lingus both the commercial flexibility and the financial strength to succeed in what is a highly competitive global marketplace,” he said.

“The company is to be congratulated for its transformation in recent years and this IPO (Initial Public Offering of shares) will now give it the access to capital it needs to develop new routes, and to grow in the years ahead in the best interests of the airline’s customers, its staff and its shareholders.”

Aer Lingus chairman John Sharman said the revenue generated by the move would enable it to realise its full potential.

“Aer Lingus and its staff can now look forward to the future with confidence,” he added.

Chief executive Dermot Mannion said the airline had demonstrated the success of its low-cost, low-fares business model across the hort-haul and long-haul markets in which it operates.

“This, coupled with our continuing focus on cost control, a well-recognised brand and a strong management team and staff will enable us to capitalise on the significant profitable growth opportunities that exist for us today,” he said.

“Becoming a publicly-listed company will enable us to capitalise fully on those opportunities.”

Aer Lingus was founded by the Irish government in April 1936 to provide air services to and from Ireland.

It is currently 85.1% Irish government-owned, with the remaining 14.9% owned by the employees.

Aer Lingus operates a fleet of 35 aircraft and carries passengers from Ireland on 11 routes to the United Kingdom and 57 routes to continental Europe.

It also operates on nine routes to the United States and one route to the United Arab Emirates.