Aer Lingus and Ryanair have had some ‘issues’ in the recent past, and things appear to be escalating on both sides of the dispute. Currently Ryanair owns about 30% of Aer Lingus’s shares, and efforts to buy more of it have been rebuffed. Now there is talk that Ryanair may offload the shares it has, if there is no resolution of the conflict.
Ryanair’s chief executive Michael O’Leary wrote a letter last week to Colm Barrington, chairman at Aer Lingus, accusing the airline of causing a loss in shareholder value by closing and then re-opening bases in various areas, and opening others only to close them again. The letter cited Belfast and Gatwick bases that opened, then closed most of their operations, and long-haul routes to the U.S. and Dubai that were opened only to be closed again.
O’Leary also called for public release of a consultant’s report on Aer Lingus’s actions that resulted in a Revenue bill of €30m to the airline, and said he’d demand a shareholder’s meeting when Ryanair declined to release the report ‘on legal advice’.
Reports indicate that Aer Lingus is suffering a major deficit in its employee pension fund that could be as much as €700m. O’Leary said earlier that British Airways would be the probable buyer for the 25% stake in the airline that is being sold by the government, but latest indications are that BA has backed off because of the pension fund problem.