Aer Lingus shares jump 7.7% as proposals to fix pension deficit prove less onerous

Aer Lingus shares jumped nearly 8 per cent today after proposals to fix a pension hole were less onerous than analysts feared and a report that Ryanair will be forced to sell half its stake in the company.

Shares in the airline were trading at €1.63 in Dublin this morning, up 7.7 per cent on last week, the biggest intra-day gain in more than two months.

The company said last week it will consider a Labour Court recommendation that it inject €110 million into an industry pension fund.

“The recommendation is well within our €200 million worst-case scenario forecast,” said Donal O’Neill, an analyst at Goodbody Stockbrokers in Dublin, with a buy rating on the stock.

“Notwithstanding that an agreement will also need to be reached with pilots under a separate scheme, we believe the resolution of this issue will remove a major risk for the company and investors.”

Separately, British regulators may require Ryanair to sell half of its 29.8 percent stake in Aer Lingus, it was reported today.

About 280,000 shares traded hands in Dublin, which is the equivalent of 54 per cent of the average daily trading over the past three months.