Ryanair "will succeed" in Aer Lingus takeover

Irish airline will need to be rescued - O'Leary 

Ryanair will succeed in buying Aer Lingus despite two failed attempts, the budget carrier's ceo Michael O'Leary said yesterday.

Mr O'Leary said Ryanair could ultimately come to its Irish rival's rescue after it exhausts its cash reserves.

"In another 18 months and with more redundancies, they'll have burned their way through the last of the cash they have and will need to be rescued," Mr O'Leary told the Independent on Sunday.

Aer Lingus is said to have eased its opposition to any future buy-up by Ryanair which is already its largest shareholder with a 29% stake.

The Irish flag carrier launched cost cutting measures last month after it reported a €93m operating loss in the first half of the year.

The news caused Aer Lingus' share price to drop to around €0.50 where it has remained, paving the way for a possible third takeover attempt by Ryanair.

Aer Lingus' share price, which closed at €0.52 at last trade, is well below Ryanair's €1.40 per share offer in December.

Aer Lingus has twice fended off hostile takeover attempts by Ryanair in as many years drawing support from shareholders, unions and the Irish government.

The Irish state, which holds a 25% stake in Aer Lingus, and the European Union also raised concerns over competition on routes out of Ireland.

The board of Aer Lingus successfully rallied support from shareholders after it described Ryanair's second takeover offer as a "rip off".

But after the first half loss was announced, Ryanair alleged items in Aer Lingus' takeover defence document were false including claims of profitability and growth.

Aer Lingus' incoming ceo Christian Mueller now plans to single out areas where belts can be tightened including its workforce.

Analysts said Aer Lingus may need to find €130m in savings, about 10% of its cost base.

A spokesman for airline workers' union SIPTU said it expected a cost cutting proposal but was yet to receive any details.

Ryanair and Aer Lingus were unavailable for comment.

www.aerlingus.com  www.ryanair.com