Ireland's New Share-owning Class to Invest in National Airline Aer Lingus

Aer Lingus, Ireland's national airline, is set to be granted an opportunity for the public to invest in the company as part of the government's plans to privatize its assets. The sudden change in strategy comes after plans to sell a 10% stake in Aer Lingus to British Airways for £50m were abandoned. Instead, the government will market the airline directly to the public, with estimates suggesting it could be worth as much as £700m if floated.

Key Takeaways:

• The Irish government will abandon plans to sell a 10% stake in Aer Lingus to British Airways for £50m, opting instead to market the airline directly to the public.
• Aer Lingus is expected to be floated on the market in June next year, with estimates suggesting it could be worth up to £700m.
• The decision comes after the successful sale of Telecom Eireann, where one in five Irish adults bought shares, a response that has whetted the public's appetite for privatised equity.
• Directors at Aer Lingus had wanted to sell a stake to BA to cement a relationship between the companies, but the deal is now unlikely to go ahead.
• Industry analysts recommend that Aer Lingus opt for a looser partnership with BA and other global airlines, rather than selling a stake.
• The Irish government is expected to cast around for other state assets to sell, with Aer Lingus being one of the next in line for privatization.

Statistics:

• One in five Irish adults (20%) bought shares in Telecom Eireann, the largest ever response to a privatization in Ireland.
• The value of Telecom shares has risen by approximately 20% since its flotation.
• Aer Lingus is estimated to be worth up to £700m if floated.
• British Airways had planned to sell a 10% stake in Aer Lingus for £50m, but the deal is now unlikely to go ahead.

Sources:

• The Sunday Times, 1999