Irish state airline Aer Lingus and the Irish government confirmed plans on Monday to list the airline on the Irish and London stock exchanges at the end of next month. Analysts expect the flotation to value the airline at up to 1 billion euros ($1.3 billion).
Aer Lingus and the country's transport ministry said the planned initial public offering (IPO) - the first flotation of an airline on the London Stock Exchange since easyJet six years ago - would give the airline the capital it needed to grow in the years ahead.
Aer Lingus Chief Executive Dermot Mannion said becoming a publicly-listed company would enable the airline to capitalise on "significant profitable growth opportunities", given the success of its low-cost model, a focus on cost control, a strong management and well-recognised brand.
A sale prospectus, including the price range, will be published in the second week of September. The company is expected to kick off a European "roadshow" next week to promote the shares to potential investors.
Aer Lingus, which has realigned itself as a low-cost carrier since a brush with bankruptcy in 2001, plans to put the IPO cash towards a 2 billion euro expansion of its fleet, with emphasis on its long-haul arm which is seen as crucial to its future.
Shares will be offered to domestic and international institutions. The public in Ireland and the UK will be allowed to buy, but a minimum subscription of 10,000 euros will apply.
The partial sell-off, which has long been a hot political issue in Ireland, has been dogged by problems, including a row between management and unions over a pensions shortfall.
Unions at the airline remain opposed to the privatisation, fearing it threatens the job security of members. The SIPTU union, whose members account for around half of Aer Lingus' 3,500-strong workforce, reiterated its opposition on Monday.
"It's not too late for the government to put their hands up and say this is a bad value proposition," Michael Halpenny, SIPTU's national secretary, told state broadcaster RTE.
The sale is going ahead despite heightened security concerns at airports and soaring fuel prices.
Mannion earlier this month shrugged off the potential impact of a delay to an "Open Skies" aviation services deal between the United States and the European Union - after negotiations broke down - which would have opened up fresh US destinations.
He said he planned in the meantime to increase capacity on existing transatlantic routes and look at opportunities eastwards from Ireland, including Asia and South Africa. Last year the airline opened a non-stop service from Dublin to Dubai.
Comments
Comments are closed.