There is a report that Etihad is interested in purchasing the Irish Government’s stake in Aer Lingus.  When the government announced its interest in selling its ownership of Aer Lingus, it said it would do so for no less than 1 euro per share. 

A 25% stake in Aer Lingus doesn’t turn those green aircraft gold, however.   There is the little matter of Ryanair holding an even larger stake at almost 30% of Aer Lingus.  Would Ryanair sell it’s stake?  Yes, it think it would if the premium for the shares was right.  It certainly is the way for Etihad to control the airline quickly. 

What is in it for Etihad?  Well, I’m not sure I see the value.  I do not think that Etihad can operate in Ireland using Etihad for a brand.  I do not think that Etihad will have any more luck than anyone else dealing with the dysfunctional groups involved in Ireland’s airline industry.   No one else has had luck so why would Etihad? 

As an investment, it only works if costs can be lowered and management is able to work with the powerful Irish unions.  Ryanair may make a lot of noise for publicity’s sake on this subject but it doesn’t mean they are wrong.   If it’s about slots, even into Heathrow, there are less risky ways to obtain slots.  If it’s about obtaining aircraft, there are less risky ways to obtain those too.  At the end of the day, I don’t see what Etihad wins from this in light of Aer Lingus’ position in European aviation or transcontinental flying.

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