Ryanair bid to take over Aer Lingus

Low cost airline Ryanair has offered close to £1 billion to buy fellow Irish carrier Aer Lingus.

Chief of Ryanair, Michael O'Leary, has said that the move was a "unique opportunity" to form a strong airline for Ireland and if the bid is successful, both companies would continue to operate separately and compete on the current 17 routes which they both use.

However, Mr O'Leary added that Ryanair will “expand, enhance and upgrade the Aer Lingus operations."

In a document proposing the offer, Mr O`Leary said that Ryanair pledged to reduce Aer Lingus`s average short haul fare by 2.5% a year for a minimum of four years, as well as reduce fuel surcharges.

The Irish Government currently owns around 30% of Aer Lingus according to the listing of the business on the London and Dublin stock markets last week, and if the offer is accepted, the Irish government would stand to receive around €500 million from the sale, with employees of Aer Lingus gaining around €200 million.

Ryanair currently owns a 17% stake in Aer Lingus.

A spokesperson for the company said: "Ryanair has grown to be Europe`s largest low fares airline by continuously lowering prices and funding these reductions through cost savings and efficiencies.

"We believe there is an opportunity to apply this successful low fares formula to Aer Lingus where currently, in its short haul operation, fares and costs remain far too high."

(EF/SP)