JUSTIN WASTNAGE / LONDON
Aer Lingus is looking to Irish investors to fund its redundancy package after the Irish Government failed to bail out the national carrier. Late last week, an emergency cabinet meeting concluded that a pay-out of more than I£10 million ($11.3 million) compensation for lost flying days following the 11 September terrorist attacks would break European state aid legislation. The airline says it needs I£100 million to fund 2,026 redundancies.
The government, which holds 95% of Aer Lingus shares, instantly released 34% of its stake (estimated to be worth I£150 million) for sale to private investors. Plans for the privatisation of the airline were well advanced, but an initial public offering has been delayed because of the effect of the US downturn on Ireland's economy. Speculation that a Oneworld alliance carrier would step in to buy the stake has been denied by British Airways and Iberia, and the government is now looking to a consortium of Irish investors as providing the most viable short-term solution. The Irish Government is thought to favour local investors over a foreign carrier, as Ireland's bilateral aviation treaty with the USA stipulates a majority Irish-owned Aer Lingus. Preliminary talks have begun in Dublin with several interested parties.
The airline says that finding an investor would be impossible without becoming leaner. Aer Lingus is not forecast to return to profitability until 2003.
The airline appointed Willie Walsh as chief executive last week after months of uncertainty about its top management.
Source: Flight International
