Business Opinion: Those who know him say Michael O'Leary is not a stupid man. The rest of us have to base our opinion on his public persona, and leaving aside some of the invective, would be inclined to the same opinion, writes John McManus

Which rather begs the question as to why he wants to put himself and his shareholder's money in the middle of an ugly stalemate that would be an Aer Lingus owned by a combination of Ryanair, its employees and the Government.

Equally, you have to ask why, in the same process, he would wilfully damage one of the most successful business propositions in the airline industry; the "no frills" Ryanair model.

Strange though it may seem, this appears to be the most likely outcome of Ryanair's €1.4 billion bid for Aer Lingus. Even the most optimistic projections don't see Ryanair getting much more than 50 per cent of Aer Lingus, given the positions of the ESOT (employee share ownership trust) and the Government who control 40 per cent or more between them. Should such a situation arise the Aer Lingus board will give a whole new meaning to the word dysfunctional.

Not surprisingly Ryanair shareholders are decidedly edgy about the takeover. The beauty of Ryanair, particularly for US investors, is that it is a pure play on the European low-cost aviation market. They see it in the same fond light with which they view Southwest, the US airline on which it is modelled and which has delighted investors for something like 30 years.

Any loss of focus, which is inevitable should Ryanair merge with Aer Lingus, will not be viewed positively. Already a couple of big investment houses have downgraded the shares and several big US holders of Ryanair stock have made their views felt.

In trying to understand why O'Leary is courting apparent disaster we can safely assume that the reason is somewhat more complex than a vision of a Irish airline to rival the likes of British Airways emerging from the Celtic mists. In fact, it would be tempting to believe that O'Leary does not really want to buy Aer Lingus at all and is really just engineering a defensive position for Ryanair.

Certainly the noises coming from the Ryanair camp over the weekend point in that direction. If, as they say, there is no intention of increasing the bid from its current €2.80 per share, then it's hard to see them ending up with much more than 25 per cent of Aer Lingus as things stand. But, they argue, that would be sufficient to deter any other predator and give them enough votes to block major transactions as long as they were not barred from voting due to conflicts of interest.

There are two reasons for being at least a little sceptical about this analysis. The first is that this is exactly the sort of thing Ryanair would be saying at this stage in the takeover, which is currently being hijacked by hedge funds and other arbitraguers who anticipate a higher bid. Convince them that one is not going to be forthcoming and they will exit the stage.

The other, more obvious, reason is that if Ryanair only wanted a large defensive stake, all it had to do was keep buying in the market until it hit the 29.9 per cent threshold for triggering a bid.

Which leaves us back where we started. Why is Ryanair prepared to take the risks involved in buying Aer Lingus, when its shareholders don't seem to be on board.

If you park these two issues for a moment, there is no shortage of reasons as to why Ryanair should be interested in Aer Lingus, not least the price which was at the low end of the valuations being talked about before the flotation.

Equally, rolling out the Ryanair model across Europe is not the "no brainer" that it may appear to be. There are good reasons why time and again Ryanair comes back to the well that is Ireland and Britian - and Dublin in particular - to establish new routes servicing their wealthy, travel-happy, island-bound populations. It is obvious that Ryanair can make more money using its new planes to push passengers through Aer Lingus's slots in Dublin and London than it can by opening new routes in far-flung Latvia servicing migrants. Ryanair also has to protect its flank in Dublin from a refinanced, independent Aer Lingus, and what better way to do that than by buying Aer Lingus.

There is, without a doubt, value to be extracted from Aer Lingus by Ryanair and it will no doubt concentrate on getting that message across to shareholders. Presumably it will also have to be upfront with those shareholders. Given that it will not have outright control, extracting this value will be a messy business and very bruising.

There will be industrial disputes, a constant stream of court cases and lots of angry statements in the Dáil . Ryanair will come in for more than the usual criticism in the media. The Joe Duffy Show will probably run a week-long special pillorying O'Leary.

The question that shareholders should be asking is, what is Ryanair's strategy for preventing this inflicting real damage on the business. But one suspects they may already know that Ryanair will deal with this problem it in the way it answered its critics in the past; with the low fares that have kept the passengers coming in their droves for the last decade and more in spite of a cost-cutting ethos that verges on the sadistic.

Perhaps the better question is, will it work this time given the enormity of the slap in the face being delivered? You can answer that by asking yourself, if you are going to stop flying Ryanair and pay more to fly with someone else because of what is about to go down at Aer Lingus.