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Irish low cost carrier Ryanair could take control of Aer Lingus in the event its domestic competitor launches a rights issue, chief executive Michael O’Leary told dealReporter.
O’Leary also indicated Ryanair could pay dividends this year if talks with Airbus and Boeing to acquire new aircrafts fail. “Then, we’ll change our strategy, stop growing the business and maximise cash for our shareholders”, he said.
On the sideline of a press conference in London, Ryanair’s CEO described a third bid as “highly unlikely” but reaffirmed he would be happy to invest in Aer Lingus if asked to. The most likely scenario within the next 18 months would see Aer Lingus raise cash through a rights issue, O’Leary said. Such a scenario would enable Ryanair to become the majority shareholder without the need to launch a third bid, he said. “We’d use our rights and end up as the majority shareholder.”
O’Leary said Aer Lingus could soon announce about “600 to 700” redundancies, which would cost the airline “about EUR 100m”. If the economic context worsens, Aer Lingus’ management may find its challenges hard to address, possibly ending up with a negative cash flow, O’Leary claimed.
Ryanair later issued a statement clarifying O’Leary’s comments, playing down the likelihood of taking control of Aer Lingus via a rights issue.
Aer Lingus was not available for comment.
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