Ireland may sell Aer Lingus stake

IRELAND is considering the sale of its 25 per cent stake in airline Aer Lingus as it no longer considers it a strategic asset, the transport minister said yesterday.

The government’s stake would be worth €84m (£74m) at yesterday’s share price.

“It’s certainly under consideration, it’s definitely one of the candidates,” Leo Varadkar said yesterday.

The government has indicated its priority is to maintain competition in the aviation sector, making a sale to rival Ryanair, which already holds close to a 30 per cent stake, unlikely.

Ryanair said in a statement it would not bid for the stake if the government indicated that such an offer would be unwelcome. It said it would work with any new investor and would consider selling its own 30 per cent stake.

Concerns that Aer Lingus may have to contribute to cover a €400m deficit in a pension fund for staff has weighed on its share price in recent months and could hamper a sale.

“I can’t see an institutional investor coming forward until there is clarity over the pension deficit,” said Stephen Furlong an analyst with Davy Stockbrokers in Dublin.