David Learmount/LONDON
Aer Lingus is seeking a US airline partner prepared to inject equity into the Irish state-owned carrier. The Government intends to maintain a controlling interest in the airline.
A study by the carrier into the strategic alliance plan has been approved by the minister for public enterprise, Mary O'Rourke. At this stage the airline will not say whether it has opened negotiations with any particular carrier.
Partners in Europe had been considered, as well as other forms of development, including acquisitions or even entering the low-cost market, but they were rejected in favour of a transatlantic alliance because, says the alliance report, that is where the greatest prospects for growth are.
Aer Lingus has hinted that the prospective alliance between British Airways and American Airlines provides an imperative for early action.
"Without an alliance, the threats posed by [increasing competition in all sectors] are potentially very significant and serious. There is no viable or credible alternative to an alliance strategy to address these threats adequately," according to Aer Lingus.
With a strong US alliance, however, Aer Lingus sees prospects for "traffic share and revenue enhancement, network consolidation and development, cost synergies and marketing strength."
O'Rourke portrays Aer Lingus as a "bride looking for a suitor", and worthy of a dowry. An equity injection from the prospective partner would be welcome to help the carrier expand into the markets which a good alliance would open up.
Aer Lingus says that its existing shareholders - the government own 95% and the workforce the remainder of the stock - have made it clear that they will not provide any further equity.
As for what level of control an equity injection could bring the "suitor", Aer Lingus says that, at present, the government sees itself retaining a majority shareholding.
Recently floated utilities in the Irish marketplace have seen Dublin retain control. At Irish Telecom the government holds a 51% share,the employees hold about 15% and the remaining 34% was taken up by other shareholders.
Source: Flight International
