Analysis: International attention on the airline is growing as its market launch date is announced, writes Emmet Oliver

The Government has finally announced its intention to seek a listing for Aer Lingus on the London and Dublin stock exchanges, with a separate private placement of shares in the US.

We know it will happen in September, not October as some reports suggested, and we know what the funds will primarily be used for - fleet renewal. But despite all the talk at Government and company presentations yesterday, the key judgment on the sale has yet to be delivered.

Dermot Mannion, the airline's chief executive admitted as much yesterday when he said: "It's now time for us to submit ourselves to the judgment of the market".

That judgment will be delivered within weeks and the valuation put on Aer Lingus will be keenly watched.

Indications last night were that the company could attract a valuation of €840-€940 million, with some optimists plumping for €1 billion.

The good news for the carrier is that analysts in the UK and Ireland, so far at least, have been broadly supportive. Far from being a liability, the presence of Ryanair in its home market has helped sentiment for the airline.

The sense that Aer Lingus has managed to compete with Ryanair and still maintain decent margins is lauded by analyst opinion. But there is some concern about where the growth is going to come from.

For example an EU-US "open skies" deal has still not been agreed and while the US is clearly a market worth exploiting, just how many lucrative US routes are waiting to be tapped by Aer Lingus?

There is also a sense that Aer Lingus will not be able to grow aggressively for some time, even with the best of intentions.

For example if it ordered a new long-haul fleet tomorrow it may not get possession of these aircraft for several years, although cancellations by other airlines can help to free up planes.

Both Airbus and Boeing have long queues of customers, many ordering far more planes than Aer Lingus will ever buy.

Its current long-haul fleet (seven Airbus A330s) has an average age of nine years, but several are significantly older. The problem is many of them are simply incapable of flying to long-haul destinations like Hong Kong or Sydney.

So while long haul is the key growth driver, overnight success in this area is not likely. With investors facing uncertainties like that, Aer Lingus stock will have to be attractively priced, although nobody likes to use the word "cheap".

The issuing shortly of a price range for the shares will wipe away some of the uncertainties. The company is anxious to have the broadest price range as possible so that its options are kept open right to the end.

The international attention on the airline is unprecedented. For example, Aer Lingus is the first airline to float in London in six years. The airline's management team has not previously been exposed to this level of scrutiny, although its executives believe the airline, with its hybrid offering of short and long haul, will chime with the investment community at home and abroad. Aer Lingus's cost base is well ahead of other flag carriers.

The airline industry is notoriously unpredictable and it is conceivable that the eventual price could be influenced by a specific event, even something relatively tangential like a pronouncement on oil prices by an Opec official can move airline stock prices.

Trading at Aer Lingus for the first half of the year is believed to be in line with last year. That would mean operating profits of €70-€75 million. Sales are likely to be down, however.

While its new Airbus short- haul fleet gives the airline higher capacity, its average fares are falling and that has pulled down revenue.

However, while the first half of the 2006 results are important, most analyst opinion is already shifting toward 2007. The airline has hedged only 17 per cent of its 2007 fuel requirement and with prices stubbornly hovering just over $70 a big decision has to be made on at what price to lock-in.

But the fuel is of relatively minor importance compared to the decision facing the airline and its team of advisers in a fortnight's time. That remains the price it puts on the airline.