If conventional wisdom says British Airways might see advantage in acquiring Aer Lingus, a closer analysis suggests BMI British Midland might have more to gain from an Irish acquisition.
But there are many potential barriers to any takeover of Aer Lingus, not least its testy workforce.
Another significant factor is the US-Ireland bilateral agreement, which restricts foreign investors to 49 per cent of Aer Lingus.
A separate EU regulation requires European airlines to be majority-owned within the union. This is seen as limiting the scope of US investors taking a significant stake in Aer Lingus.
While insiders claim US bilaterals have been amended in the past, some believe the most likely scenario is that a majority of Aer Lingus would remain in Irish hands. In this context, however, a strategic alliance is not seen as an attractive option. The Government wants to sell Aer Lingus in its entirety.
As it stands, the current Ireland-US bilateral agreement would definitely present difficulties if BMI British Midland, a privately-owned carrier, saw value in Aer Lingus.
Its spokeswoman said: "As a company we would consider every opportunity that would present itself, but we don't have any interest in becoming a minority shareholder."
Still, she pointed out that BMI British Midland is in an expansionary phase. Today, for example, it introduces a second transatlantic route to Chicago from Manchester. Analysts believe the company would see significant value in acquiring valuable peak-time landing slots at Heathrow Airport controlled by Aer Lingus. Such slots could be used to introduce services from London to the US, though that would probably reduce the number of Aer Lingus flights to London from Cork and Shannon.
BMI British Midland's membership of the Star alliance could create other difficulties. Any deal with BMI British Midland would probably mean Aer Lingus would have to leave its own alliance, OneWorld. Its membership of the group is seen as a boon to the business.
Ironically, that is a crucial factor weighing against the possibility of a deal with British Airways, which partners Aer Lingus in OneWorld. Airlines in such systems can treat all flights in the group as their own for bookings purposes. This means British Airways already has automatic access to Aer Lingus passengers, who might, for example, travel with the Irish carrier to London before connecting with a long-haul flight not available from the Republic.
According to one analyst, this means British Airways already enjoys many of the benefits to be gained from an outright takeover of Aer Lingus "without having to put equity into it".
A British Airways spokeswoman in London declined to comment.
Given that Aer Lingus needs £200 million (€255 million) to renew its fleet, the potential financial return on such an investment would be limited for a considerable period, one expert said.
