The lowcost carrier Ryanair will start winding down its stake in the Irish flag carrier Aer Lingus starting next year to comply with the UK watchdog’s ruling on concerns over competition.
“We appreciate the fact that Ryanair has to sell down its share to 5 per cent because it is our main competitor,” said Christoph Mueller, the chief executive of Aer Lingus, in an interview in Abu Dhabi.
“We all really hope that the issue of Ryanair would be done in the course of 2015. But when exactly in 2015, it is very difficult to say.”
The Dublin-headquartered budget carrier controls a near 30 per cent stake in Aer Lingus, with the Irish government holding more than 25 per cent of shares.
Ryanair had previously tried to takeover the company.
Earlier this year, the UK’s Competition and Markets Authority ordered Ryanair to reduce its stake in Aer Lingus to only 5 per cent for “competition purposes”. he regulator will oversee the sale.
However, Mr Mueller said that there is a greater desire to have more shares of his company traded on the market. Currently 35 per cent of the airline’s shares are tradable, which are listed on the Dublin and London stock exchanges.
“We always felt that the liquidity of our stock is not sufficient. This is what our shareholders tell us and so far we are happy that the sale will take place,” said Mr Mueller.
“There is a lot of demand for our shares, especially from [investors in] the United States.”
There is also mounting speculation that Etihad Airways could raise its stake in Aer Lingus from its current 4.99 per cent level.
But Mr Mueller said the next phase of partnership with Etihad will be about creating synergies between the two airlines. “We will focus on the cost side and on synergies and joint purchasing, and products of this nature.”
Aer Lingus said in July that Mr Mueller will leave the company in May next year, after being the chief executive since May 2009. The announcement came as it faces a pension deficit, a row with trade unions, and uncertainty over Ryanair’s stake.
“We gave us until May of next year in order to have a decent search [period] for a successor,” he said.
Aer Lingus posted an operating profit of €61.1 million (Dh312m) last year, versus €69.1m the year before. The carrier’s long haul business, or its transatlantic routes, continues to perform better than short haul routes.
selgazzar@thenational.ae
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