Michael O’Leary’s life-long ambition of taking over Aer Lingus could be edging closer. Ryanair is preparing to revive a €1 billion (£800 million) bid for Aer Lingus as European regulators adopt a more flexible stance towards mergers in the face of high fuel and toughening market conditions.“We are adopting a wait-and-see approach because there is a lot of consolidation coming and that may force the EU to change its position,” a Ryanair spokesperson told The Times newspaper.

The budget carrier said that the worsening economic climate and high fuel costs could force European competition regulators to adopt a more flexible attitude towards mergers.

Last year the European Commission blocked an attempt by Ryanair to buy Aer Lingus amid fears that the combined group would create a monopoly over the Irish market.

But the market has since turned drastically, with numerous airlines going bankrupt whilst other entering merger talks to improve their margins.

Troubled Aer Lingus last week posted an operating loss of €22.3m (£17.93m) for the first half of this year, down from an operating profit of €2.6m a year earlier, warning that widespread cost cutting, including job cuts, was on the agenda.

Ryanair already owns 29.8 per cent of Aer Lingus, but its rival’s share price has fallen sharply since the first takeover attempt.

Stephen McNamara, a spokesman for Ryanair, said: “As the current wave of European airline mergers and takeovers gathers pace, it is clear that Aer Lingus is being marginalised on the sidelines of European aviation, losing money, with no apparent strategy to return to profitability.

“Its independence strategy, which over the past year has delivered higher fares, a sixfold increase in fuel surcharges, route closures in Ireland, and a lurch to substantial losses has failed its customers, its staff and has failed to secure Aer Lingus’s long-term viability.”

Dermot Mannion, chief executive of Aer Lingus, said: “The competitive landscape has not changed one bit since Ryanair made its first approach. The Commission rejected their bid because of the market concentration Ryanair and Aer Lingus would have in Ireland. What happens elsewhere in Europe will not change that dominance.”
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