Ryanair has launched another takeover bid for Aer Lingus offering a 50% premium over the current share value in the marketplace.  Its previous bid was shutdown by the European Union on anti-competitive grounds.  Etihad has expressed some interest and now Turkish Airlines is pondering an acquisition as well.

Oddly enough, no major airline group seems that interested in Aer Lingus.  No other major European airline other than Ryanair seems interested.   It’s down to scrappy outsiders who want a piece of the airline.

This is because the government owns a major stake in the airline and between it and Ryanair, there is a majority control issue.  You can’t control Aer Lingus without one or the other selling their stake.  Neither of those two parties is interested in selling their stake to someone that can either A) harm the Irish government politically or B) impact the competitiveness of the Irish airline industry.   Or both (Ryanair).

I think much is made about the Irish government selling its stake and I agree that the current government is sending louder signals than most but at the end of the day, I don’t think Aer Lingus is getting sold or merged into any other airline.

I think Ryanair is interested in Aer Lingus from a long haul perspective and it provides growth in an area where Ryanair has not so far moved into.  With such an acquisition, it gains not only the equipment but the know-how needed to execute a long haul international strategy.

Politically speaking, the Irish government has much to fear when it comes to politically fallout from such a sale.  The airline is heavily unionized and those unions carry power when it comes to local politics in Ireland.  Given the size of Ireland, all politics is local.  Jobs are important in an economy that has been impacted by the Euro crisis, debt and a lack of economic growth.

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