Aer Lingus rejects Ryanair criticism

 

Ireland's Aer Lingus has written to shareholder and long-time rival Ryanair to reject the latter's complaints that it is "continually ignored" by the Aer Lingus board, the latest in a long-running war of words between the two airlines.

In a letter sent to Ryanair and released on Thursday, Aer Lingus said Ryanair was a source of concern to other investors and welcomed its recent statement that it would be prepared to sell its 30% stake in Aer Lingus if the government found a buyer for the state's 25% holding.

"One of the greatest concerns that we hear from shareholders relates to Ryanair's shareholding in the company and its impact on the company's options and value. As such, we welcome your recent statements that Ryanair would be prepared to dispose of its shareholding in Aer Lingus," Chairman Colm Barrington wrote in the letter.

"We would hope to have constructive discussions with you on this issue."

Ryanair, Europe's largest budget airline, has twice had takeover bids for Aer Lingus rebuffed and its outspoken Chief Executive Michael O'Leary has been a long-standing critic of the company.

In recent public statements, Ryanair complained about Aer Lingus's handling of a 400 million euros pension deficit, which has depressed the company's share price, as well as the absence of a dividend payment and decision to buy out a profit share deal with employees.

Ireland's government is considering selling its 25% stake in Aer Lingus, valued at around 89 million euros, as it seeks to cut its debt under an EU-IMF bailout, but uncertainty over the pension deficit is seen as a hurdle.

Shares of Aer Lingus, which have dropped nearly 40% so far this year and nearly 70% since its 2006 flotation, were down 0.5% at 67 euro cents. Ryanair's stock was 1.4% lower.