Aer Lingus has admitted to having “no idea” if it would be able to resist a third bid by arch rival Ryanair after posting deepening first half losses. But the beleaguered carrier dismissed as “speculation” new reports that it is set to make 500 redundancies from its 3,800-strong workforce in a €130 million savings plan.
Chief financial officer, Sean Coyle, gave the strongest hint yet that the former Irish state-owned carrier was resigned to a takeover.
He said: “Ryanair will always come back with a bid. Ryanair, from the point of view of having a [near] 30 per cent shareholding, will continue to pursue the company.”
“Clearly we can’t sustain operating losses of these levels, we can’t sustain the kind of cash burn we’ve had in the first half of the year and we need to rebase our cost structure to live with the lower fares that our passengers are prepared to pay.”
He also admitted that no bank would lend money to an airline burning through €400 million of net cash in 12 months. He told The Times: “We have to come up with a cost plan to stabilise the position. Nothing is ruled out at this time.”
Ryanair has made two offers to buy out the company. Its most recent bid attempt came last December when it offered €1.40 a share - half what if offered in 2006, shortly after the airline was floated on the Dublin stock exchange.
Aer Lingus has vehemently resisted Ryanair’s approaches, arguing that they have significantly undervalued the company.
Ryanair is currently banned by European takeover rules from making another offer for Aer Lingus until January 2010.
Michael O’Leary, Ryanair’s chief executive, issued a statement questioning the reliability of Aer Lingus’s earnings forecasts, but he did not mention the prospect of a new offer.
The airline is looks likely to make 500 redundancies from its 3,800-strong workforce in a €130 million savings plan, according to the Irish Times, in a report the airline dismissed as “speculation”.
“We haven’t given any guidance on what the plan contains,” a spokesman said.