The flotation of Aer Lingus is expected to be discussed today by the Cabinet, with the Taoiseach Bertie Ahern anxious to make a quick decision on the airline's future.

It is understood at meetings during the past fortnight with unions that Mr Ahern said he wanted to assure the airline's management that funding for a new long-haul fleet would be made available soon. It is understood he told unions that flotation appeared to be the best option.

The airline has a requirement for more than €1 billion to buy a new long-haul fleet and it has been negotiating with manufacturers Airbus and Boeing for some time.

The issue is expected to surface during an overall presentation on aviation issues by the Minister for Transport, Martin Cullen.

The issue of a terminal for Dublin Airport is also expected to be discussed.

In recent weeks, the support for floating part of Aer Lingus on the stock exchange has grown. While the Progressive Democrats were always supportive, previous scepticism among some Fianna Fáil ministers appears to have dissipated.

However, the key question is whether the Government simply says it favours a flotation "in principle", or whether it actively puts in place steps to bring it about.

Aer Lingus is currently selecting a new chief executive and uncertainty over the airline's future may have put off experienced and credible candidates.

The Government previously said it wanted a decision on Aer Lingus by the end of January, but government sources are now talking about a decision by Easter.

While an initial public offering typically takes four to six months, the Government would like to make funds available to Aer Lingus as soon as possible. With oil prices rising and extra capacity from Ryanair about to enter the European market, the window of opportunity could be closing for Aer Lingus.

Despite press reports, sources said that no decision had been taken on what size stake might be offered. The stake offered could be significant because the Government is anxious to interest institutional investors.

Once the Government retains at least a 25 per cent stake in the airline, it would be impossible for any other interest to mount a complete takeover of the company.

This was pointed out in last year's Goldman Sachs report. It said that anyone mounting a takeover needed 80 per cent of shareholders' acceptances.

The unions at Aer Lingus remain implacably opposed to any sale of shares. The president of Siptu, Jack O'Connor, said last night that no deal had been done with the Government on aviation issues.

He said he strongly rejected any suggestion that the union would be prepared to accept a sale of shares in Aer Lingus in exchange for State involvement in a new Dublin airport terminal.

"I would not be a party to something like that and, to be fair, such a deal was never offered to me at any point," Mr O'Connor said last night.

Meanwhile, Aer Lingus is expected to shortly report that 1.2 million passengers were carried last year on the transatlantic, compared with 1.1 million in 2003.

The airline also said yesterday it would be installing its self-service check-in system, Fast Pass, in various airports in the future, including Cork, Shannon, London Heathrow and New York JFK. Currently, 55 per cent of passengers are using the Fast Pass system. With transatlantic passengers now able to use the system, this figure should increase to 66 per cent.

Aer Lingus will shortly announce its 2004 results, including operating profits in excess of €105 million.