Ahern says Government will not sell Aer Lingus

The Taoiseach has said the Government will not reduce its stake in Aer Lingus under any circumstances.

Mr Ahern said it may have been "naive" for people to believe that Ryanair would not attempt a takeover of the national airline, but that it was entitled to change its earlier views on that matter.

Ryanair announced its bid of €2.80 per Aer Lingus share on October 5 ^thlast and formal offer documentation was issued to all Aer Lingus shareholders on the October 23 ^rd.

Speaking on RTÉ Radio 1's This Weekprogramme today, Mr Ahern was asked if he at any time expected or feared that Aer Lingus would be taken over by Ryanair.

"There was a lot of discussion and a lot of analysis as you would expect in this. But Ryanair had made it very clear that they weren't going to get into this so I think people believed them and maybe that was a naive thing, but I think they said that wasn't their strategic view and then they changed that view which is the entitlement of people to do in the world," Mr Ahern said.

"But I think the important thing for us is that Aer Lingus plan, the plan of the Dublin Airport Authority, that they can continue on that plan, they have a good plan. I want to see Aer Lingus as the reason that we allowed outside investment in to allow it to expand and develop."

Mr Ahern added: "I made it very clear early on....I said no matter what happens in the future that I would not put my name under any circumstances...to the State going any lower [in its shareholding] than what we were in."

Asked whether that meant Aer Lingus would not be taken over, the Taoiseach replied: "Under no circumstances. I hope for the long term that the State's participation in this and it's percentage should not be diminished any further."

Ryanair now owns more than 19 per cent of the airline. The Government retains a quarter of the airline's shares. Aer Lingus workers own 12.58 per cent of the company through their employee share ownership trust (ESOT). Its pilots own 2 per cent and businessman Denis O'Brien has 2.1 per cent, and says he is opposed to Ryanair's bid as it poses a threat to competition in the Irish aviation industry.

Aer Lingus workers and former employees who are beneficiaries in the ESOT have meanwhile begun a ballot on Ryanair's takeover offer for the airline.

Ballot papers were issued to 4,665 beneficiaries on Friday, a statement on behalf of the ESOT said today.

The ballot is being administered by PricewaterhouseCoopers. Papers must be returned by next Wednesday at noon.

In a letter to beneficiaries involved in the ballot, the board of directors of the ESOT told them the decision to accept or reject the Ryanair offer was up to them.

However, the letter says public statements by Ryanair chief executive Michael O'Leary that the offer would result in each ESOT member getting the sum of €60,000 are "inaccurate".  The board believes current staff would realise just €39,000, while former workers may get closer to €14,000 if they acept Ryanair's offer.

"Firstly, as any offer proceeds must be re-invested in Ryanair shares on the stock market to avoid penal tax consequences, the effect of the trustee accepting the offer would be to replace Aer Lingus shares with Ryanair shares in the ESOT, rather then an immediate receipt of cash by beneficiaries," the letter says.

The Aer Lingus ESOT was set up to facilitate the holding of shares in the company on behalf of employees and former employees. It is a significant shareholder and has the right to appoint two directors, as long as it holds at least 5 per cent of the shares. The ESOT also has rights to a significant profit share from the company.