Aer Lingus will press ahead with the search for an investor within weeks, despite concerns that a deal will be very difficult to complete before the general election.
The State airline has threatened compulsory redundancy for pilots who refuse to accept a voluntary package in its rescue plan, which will see the first departing workers leave tomorrow.
While pilots have threatened industrial action against forced lay-offs, the company is expected to intensify the search for investors at the end of the month. In the meantime, discussions with the pilots' union, IMPACT, are likely.
Certain airlines and Irish and international venture capital groups will be approached, it is understood.
The airline most likely to be approached is British Airways, which partners the Irish airline in the OneWorld alliance. British Airways and other airlines are believed to have expressed tentative interest in a trawl by Government advisers last summer. OneWorld member American Airlines is also likely to be approached. So too are other large European operators such as Lufthansa and Aer France, although neither is part of OneWorld.
Aer Lingus's corporate finance adviser, NCB Stockbrokers, will lead the process, assisted by Citigroup, the former Salomon Smith Barney.
While figures familiar with Aer Lingus thinking say the company is bound to uphold a Government decision to sanction new investment by moving soon, political observers said delivery will be very difficult.
Regardless of the outcome of the company's difficulty with pilots, the rescue plan to prevent large losses projected after the attacks on the US last September remains to be implemented.
In addition, political observers said there was a growing feeling the election would be called after the Easter recess, leaving less than three months to advance the process and enact the legislation required to facilitate a sale.
Given the scale of Aer Lingus's difficulties and the requirement to secure the support of unions for a sale, this is a very tight deadline.
In addition, Aer Lingus is understood to have conducted no formal valuation of the company, and any sale of shares would require a detailed due diligence exercise by the buyer.
A slower process following implementation might inflate the price, but maximising the return from any sale of shares is not seen as the primary issue. The priority is securing outside capital to support the company's recovery.
This is crucial following the EU's rejection last autumn of any additional State investment, despite the crisis developing in the global aviation industry at that time. A London-based analyst with Commerzbank, Mr Chris Tarry, said the most important factors would be the price and size of the stake on offer.
Up to 85.1 per cent of Aer Lingus might be sold, because the Government decision sanctioning sale did not restrict its scope.
Assuming SIPTU members accept the new Aer Lingus employee share option plan, the staff will hold the remaining 14.9 per cent.
While Mr Tarry was not willing to speculate on price, certain other observers believe Aer Lingus would be very lucky to achieve a valuation of £250 million (€317 million). This is only half the £500 million valuation mooted a year ago.
Mr Tarry said: "The most logical buyer would be British Airways, because there's great scope for developing Dublin as a hub for transatlantic travel into Britain."
While Aer Lingus owns a large number of valuable landing slots at Heathrow Airport in London, he said any change in their use had to be sanctioned by the British authorities.
