The Government remains in favour of floating Aer Lingus on the Stock Exchange, the Minister for Public Enterprise said yesterday. Speaking ahead of a report from advisers on the national airline's future Ms O'Rourke told RTE the firm would only be floated "when the market is right".

She added that the international environment was negative for airline stocks, and that it would be a "very bad time to go to market".

The Minister said the general aviation industry internationally has eteriorated. "Companies all over Europe are facing very real economic dangers and many have bottomed out completely." In that environment, Aer Lingus had done well, she added. But this year it will report losses as high as £20 million (€25.4 million). The Minister still insisted the Government had taken a formal decision to float the airline and that would not change. She will report to Cabinet on the advisers' findings, expected towards the end of this week.

The report from AIB Capital Markets and Citigroup, engaged last year to co-ordinate the flotation, will also outline the prospects for a future trade sale or any other means of privately raising cash for the airline. But the Minister is convinced the best way forward is to float.

She said talks between management and the unions had restarted. These could see an additional 9.9 per cent of the airline transferred to workers, who already own 5 per cent of the firm under a scheme agreed at the time of the Cahill rescue plan in 1994.

"My wish and the Government's desire is what can be achieved should be good for the airline itself and done in the spirit of partnership with members and unions there," she said.

The airline is also expecting legal actions following the dismissal of its former chief executive, Mr Michael Foley. The Minister said there were "clearly going to be legal actions from more than one quarter". But she dismissed suggestions that this could harm the airline's future commercial prospects.