The Etihad purchase of just under 3% of Irish airline Aer Lingus does leave the elephant in the room unmentioned when it comes to Australia, which is when or if it will be ‘invited’ to take equity in recently reorganised Virgin Australia Holdings, the entity that happens to own 100% of unlisted Virgin Australia International Holdings.
The Aer Lingus purchase is the smallest equity stake Abu Dhabi based Virgin Australia alliance partner Etihad has so far announced, having earlier this year purchased 40% of Seychelles Airlines and nearly 30% of Air Berlin.
However this extract from a report in the Irish Times overnight suggests that it might just possibly be interested in the remaining Irish state investment in Aer Lingus, which was privatised in 2006, or the Ryanair stake, for which the world’s second largest low cost carrier says it would be a seller at the right price.
Minister for Transport Leo Varadkar said Etihad’s stakebuilding in Aer Lingus was a “vote of confidence in the airline and the Irish economy”.
“The Government has decided that it is going to sell the 25 per cent stake in Aer Lingus, but it will only be sold at the right price and at the right time,” the Minister said.
“Etihad has expressed an interest already but we are not in any negotiations with them at present.”
Aer Lingus’s share price closed in Dublin yesterday at 99.3 cent – just below the €1 mark that the Government has indicated would be the minimum it would accept for its 134 million shares in the airline.
Ryanair, Aer Lingus’s biggest shareholder with a 29.8 per cent stake, said that the sale of the Government’s stake to Etihad or a financial investor would result in the Irish airline being “broken up and some or all of its Heathrow slots lost to Ireland”.
Ryanair also restated its position from last September that it would not bid for the Government’s stake if the State indicated that such a bid would be “unwelcome”.
The Michael O’Leary-led airline added that it would welcome another financially strong airline or investor acquiring the Government’s stake to help restore shareholder value.
In addition, Ryanair said it would not rule out selling its stake to whoever acquired the Government’s stake “subject to an acceptable agreement on price and maximising shareholder value”.