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Irish government could ditch Aer Lingus stake

The Irish government looks as if it might be putting its 25 percent stake in Aer Lingus on the market.

Successive governments have retained the quarter share in what was once Ireland's state airline, but given current fiscal issues facing it, cash would seem to be the preferred option.

As such, there was no longer a strategic case for the government in Aer Lingus, transport minister Leo Varadkar said last week.

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"No formal decision is made yet," he stressed.

"What I can say is that Aer Lingus stake was held for strategic reasons and having studied the matter over the summer I don't think that really stands anymore."

Economist Colm McCarthy had recommended disposal of the stake in his report into the possible sale of state assets in April. Varadkar had indicated several months ago that a sell-off was being considered.

"We have a 25 percent stake. You actually need 30 percent to block any changes on slots. More and more people are using other connections other than Heathrow," Mr. Varadkar told Newstalk radio in Dublin.

The minister was referring to Aer Lingus landing slots in London's Heathrow and elsewhere. Such slots are considered a primary asset of any airline.

The Irish Times reported that budget airline Ryanair, "which twice failed in audacious takeover bids" for Aer Lingus and now holds 29.4 percent of its rival, was quick to dismiss talk of a sell-off.

In a statement, Ryanair said the airline would not bid to take complete control of Aer Lingus if a sale went ahead.

"Ryanair would welcome another financially strong airline/investor acquiring the government's 25 percent stake, which could then work with Ryanair and other like-minded shareholders to restore shareholder value, which has been destroyed over the past five years by the board and management of Aer Lingus," Ryanair said.

Ryanair also said it would consider selling its stake in Aer Lingus if the bid went through.

Aer Lingus, which is marking its 75th anniversary this year, has seen a share price decline in recent years and has implemented service cuts, including to some transatlantic routes.