BILLIONAIRE FINANCIER Desmond is to be recommended as the preferred candidate to become the next chairman of Aer Lingus by a subcommittee of the airline's board, The Irish Timeshas learned. Simon CarswellFinance Correspondent reports
The airline's current chairman, John Sharman, has already indicated he will be stepping down when his contract expires next March. A subcommittee of the airline's board, charged with finding his successor, is expected to recommend to the company's board that Mr Desmond is their preferred candidate.
It is understood other names have been considered, but that Mr Desmond is their favoured chairman.
It is not clear whether Mr Desmond has yet agreed to take the position, if offered, though an announcement is expected to be made on Mr Sharman's successor in the coming weeks.
Spokeswomen for both Aer Lingus and Mr Desmond declined to comment. Aer Lingus chief executive Dermot Mannion is thought to have met Mr Desmond recently, who may also meet key shareholders in the airline, including Michael O'Leary, the chief executive of Ryanair, which owns 29.8 per cent of the former State airline.
The proposed chairman is also likely to meet a representative of the Government, a 25 per cent shareholder in the airline, as well as a representative of the company's staff, who own 14.2 per cent.
Mr Desmond is close to telecoms entrepreneur Denis O'Brien, who owns more than 2 per cent of Aer Lingus.
The financier is also an admirer of Ryanair, which launched a hostile but failed takeover of Aer Lingus after buying into the airline in 2006.
Mr Desmond has spoken publicly about his dealings with Ryanair when he was chairman of Aer Rianta
almost 20 years ago.
He said in an interview in 2004 that there would be "no Ryanair without Aer Rianta" because the State airports company chose not to put the airline into receivership over debts owed while he chaired Aer Rianta."We took a decision that Ryanair was a mould-breaker and we extended additional credit. If it hadn't got that additional credit, it would have been history," he said.
Mr Desmond stepped down as Aer Rianta chairman in 1991 after the Telecom Éireann/Johnson, Mooney and O'Brien controversy, a move he later regretted.
He was also an outspoken critic of the Government's decision to break up Aer Rianta into three airport authorities. "It is the silliest decision ever," he said. "There are too many savings to be made by keeping the three airports together. Why replicate or duplicate overheads, including boards and management?"
One of Mr Desmond's shrewdest investments was in the aviation industry - he earned a massive profit on the €1.1 billion sale of London City Airport in 2006, netting an estimated €960 million.
Mr Sharman, chief executive of London-based aviation finance company Spectrum Capital, was named interim chairman of Aer Lingus in 2004, following the resignation of Tom Mulcahy, a former chief executive of AIB.
He has held a five-year contract as chairman of Aer Lingus and was paid a fee of €175,000 by the airline in 2007, according to its annual report. Aer Lingus is facing tough financial times as the price of oil remains at more than $125 a barrel, a level at which the airline said it would "at best" break even this year.
The appointment of a high-profile candidate of Mr Desmond's calibre is likely to appease shareholders and investors.