The founder of the private bus company Aircoach, Mr John O'Sullivan, is in line for a €7 million windfall from the sale of his company to British bus and rail group FirstGroup.

FirstGroup, the largest bus company in Britain, is paying €15 million for 90 per cent of Aircoach, it was announced yesterday.

Mr O'Sullivan will retain a 10 per cent stake and will remain as managing director.

There are three shareholders in Aircoach - Mr O'Sullivan, his wife Una and chief financial officer Ms Mary Leane. Mr O'Sullivan and his wife Una own 90 per cent of the equity and will be the main beneficiaries of the sale.

While €15 million is the purchase price, a significant portion of this will be used to wipe out the debts of Last Passive Ltd, the company behind Aircoach. It is understood that Mr O'Sullivan and his wife stand to make a €7 million gain once the debts have been paid off.

Mr O'Sullivan, who previously worked as an engineer with Bus Éireann, set up Aircoach in 1998 and the company now has a fleet of more than 40 vehicles. The company's familiar blue coaches now make 150 round trips daily to Dublin Airport.

Mr O'Sullivan, who lives in the Curragh in Co Kildare, faced serious opposition when he first started operating to the airport. He said yesterday some taxi drivers protested to Aer Rianta and there were also difficulties with some Dublin Bus drivers.

Mr O'Sullivan said the company performed strongly in the past five years but major funds were needed to go to the next level. He said that, along with his advisers, Mason Hayes & Curran, he decided FirstGroup was the best fit.

He said the investment would help the company to prosper when liberalisation of bus transport took place.

"It was important for us to find a partner that aspires to similar standards and values within the public transport sector. We are very familiar with the major companies in this sector, both in the UK and Europe, and we believe that FirstGroup will assist us in our aggressive expansion plans," said Mr O'Sullivan.

With a fleet of about 10,000 vehicles and more than 23 per cent market share of the UK bus market, FirstGroup is the UK's largest bus operator. The company has three core operational areas - UK buses, UK passenger rail franchises, and US school buses and transit management.

Mr Leon Daniels, divisional director of FirstGroup, said: "The positive direction taken by the Department of Transport towards the introduction of competition in road passenger transport services attracted FirstGroup to look at the Irish market. Aircoach provides an ideal platform."

The financial performance of Aircoach has been steadily improving over recent years. In the last set of accounts (2002) filed by Last Passive, net assets stood at €66,074, while accumulated losses on the profit and loss account stood at €223,427, down from €827,033 in the year before.