The Government's reported decision to reduce its shareholding in Aer Lingus shortly after the flotation last week, raises "serious questions" about the competence of the Minister for Transport, the Labour Party has said.
Transport spokeswoman Róisín Shortall said reports that the Government had taken the decision to reduce its holding shortly after the flotation, "so opening the door to the Ryanair bid", were "very alarming".
Róisin Shortall, Labour Party
"The government took the highly unusual step of reducing its stake in the airline just days after the airline was floated. Best practice in such situations would be to wait at least 30 days before making such a decision," she said.
"The government decision, on the advice of experts, to offload shares at precisely the time that Ryanair were increasing their stake, has played into the hands of Michael O'Leary. This decision raises serious questions over the competence of Transport Minister Martin Cullen," she said.
Ms Shortall also said she was "dismayed" to learn the the taxpayer has had to fork out €30m to consultants and experts who provided advice on the flotation.
"Precisely what value for money did we get for this? The initial sale price was set on the advice of these so-called experts at a ridiculously low €2.20, only to shoot up to €2.80 within a matter of days. In other words, the shares were completely underpriced."
Ms Shortall said Aer Lingus was now "a vehicle to serve interests of investors rather than the interests of the travelling public".
"Martin Cullen needs to explain why that [flotation] share price was so low and he also needs to outline his plans for heading off the Ryanair's attempt to take over the company."
Ryanair will this week attempt to quell a potential revolt among some of its larger US investors who have raised major concerns over its €1.4 billion bid for the State carrier.
The company said at the weekend it plans to talk to investors in the US and to explain the rationale of the move to them. US investor, Gilder, Gagnon, Howe and Co raised concerns about the need for the bid and its timing during a investors' conference call last week.
The Irish Timesreports today that the staff shareholding group at Aer Lingus and several third parties are preparing to block the Ryanair bid.
The body which holds the shares on behalf of staff, the Employee Share Ownership Trust (ESOT), has discussed mechanisms to finance an additional purchase of shares.
If the ESOT and other staff shareholders manage to increase their holding, the chances of Ryanair securing more than 50 per cent of Aer Lingus shares would diminish.