Aer Lingus still has a long way to travel

ONE MORE THING:RYANAIR'S STATEMENT this week that it would not stand in the way of another big airline taking over Aer Lingus, albeit with caveats, was hugely significant.

While Michael O’Leary has made these points before, it is arguably the clearest signal yet that he accepts that Ryanair will never be able to buy Aer Lingus.

Ryanair’s comments were in response to Minister for Transport Leo Varadkar indicating that the State’s 25 per cent holding in Aer Lingus might be sold.

Ryanair was “happy to confirm” that it would not bid for this stake if the Government felt that would be “unhelpful”, which it would.

Ryanair would also “welcome” a financially strong investor buying the State’s stake to help “restore shareholder value”.

This is an unlikely scenario because an Air France, Lufthansa or the Willie Walsh-run International Airline Group would balk at buying a minority stake in Aer Lingus, while Ryanair was on the share register. It’s simply not worth the hassle.

The key point from Ryanair was that should another big airline/investor acquire the State’s holding, it would “not rule out entering into discussions with that party for the subsequent disposal” of its near 29.8 per cent stake “subject to an acceptable agreement on price and maximising shareholder value”.

Perhaps, after two failed bids for Aer Lingus and with its shareholding the subject of an investigation in the UK, O’Leary has decided that it’s time to move on.

While O’Leary might not want Aer Lingus to fall into the hands of one of the big airlines, he has consistently demonstrated an ability to run rings around the European flag carriers in short-haul flying.

It is also possible that Aer Lingus would simply become a feeder for the long-haul operations of a British Airways or Air France. This would not pose a threat to Ryanair in Ireland.

O’Leary has certainly put it up to the Government to match its words with action.

With Aer Lingus’s share price bobbing around the 66 cent mark, the State’s stake is worth about €88 million. That could pay for a lot of hospital beds or school computers, although it would undervalue the airline. Aer Lingus has net cash of about €358 million or about 67 cent a share.

It also has aircraft assets and potentially valuable slots at London Heathrow and JFK in New York.

A long journey lies ahead but this might yet prove to be a defining week for Aer Lingus and Irish aviation.