Abu Dhabi's Etihad Airways is looking at buying a stake in Aer Lingus, it was reported today.
The Financial Times said Etihad has approached the Government to buy its 25 per cent stake in the carrier. Etihad declined to comment on the report.
The airlines is also said to be in talks with Britain's Virgin Atlantic to join the UK carrier in its bid for BMI, the loss-making unit of Lufthansa, and is discussing a possible stake in Virgin Atlantic, said one source.
"Discussions have been ongoing on this (partnering for BMI bid) and a possible stake in Virgin," said an Abu Dhabi source close to the deal who asked not to be named.
Etihad and Virgin Atlantic declined to comment.
Etihad was earlier reported to have expressed interest in Virgin Atlantic, which hired Deutsche Bank to assess the market for a possible alliance with rival carriers or a sale.
Etihad cannot pursue a bid alone due to foreign ownership issues, the FT reported, stating that the Abu Dhabi-based carrier and Virgin Atlantic had held talks for a partnership if the UK carrier were to bid for bmi.
"The news is credible, I wouldn't question it," another top Abu Dhabi source told Reuters.
German airline Lufthansa has said it is considering finding a partner for bmi and has mandated bankers to sound out a potential sale. Airlines are keen to get hold of BMI's coveted takeoff and landing slots at London's Heathrow airport.
Asked if Etihad would take a stake in BMI, the first source said: "It depends on the outcome of the bid."
Virgin Atlantic chief executive Steve Ridgway said last week the group is still keen on buying BMI despite waning growth across the aviation industry.
BMI controls about 10 per cent of the take-off and landing slots at Heathrow, the world's second-busiest airport, making it second there only to IAG-owned British Airways, which has around 45 per cent of the slots.
Reuters