Aer Lingus Calls Ryanair Comments On Aer Lingus Cash Position “untrue and deliberately misleading”

8th Oct 2001

Aer Lingus Group Chief Executive, Larry Stanley has rejected allegations by Ryanair in relation to the cash position at Aer Lingus describing the comments as “untrue and deliberately misleading” adding “The only conclusion to be drawn from the Ryanair comments is that they are trying to distort and confuse the very serious situation facing this company and most airlines worldwide.”

Ryanair claims that Aer Lingus had €800 million in cash at the start of 2001 and would retain this amount by the end of 2001. This is simply not true. From the notes to the Aer Lingus Accounts, referred to by Ryanair (set out below), it will be obvious that the facts are as follows:

At 31 December 2000, the Aer Lingus Group had cash, deposits and liquid resources of €825.3m.

Of this, amounts totalling €381.5m were freely available to the business.
The remaining deposits of €443.8m were restricted deposits which are not available to fund the Group`s trading operations. These are specific amounts placed on deposit to repay specific aircraft repayment obligations on their due dates. They are legally secured to the providers of aircraft loan and lease finance and can only be used to meet loan and lease finance repayments.

Larry Stanley added “I presume Ryanair is not suggesting that any properly incorporated company reneges on its legal obligations.”
[Note 13 to 2000 Accounts:


(a) The Group holds foreign currency deposits in order to meet certain finance lease obligations which are denominated in the same currency. The deposits together with the interest receivable thereon will be sufficient to meet in full the lease obligations and related lease interest over the period of the leases.
(b) The Group also holds other restricted deposits to meet certain loan obligations.

Aer Lingus is fully focused on taking the steps that will ensure its survival and build a viable future for the business. “We have planned to reduce our operation by 25%, we have cut capital expenditure and a range of other costs, we have reduced the number of staff and plan to make further reductions, and we are finalising plans for the further radical steps necessary to achieve viability including new fares promotions in our major markets.” Larry Stanley concluded.



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