Transport Minister Leo Varadkar has confirmed that ministers are considering the sale of the Government's stake in Aer Lingus. He was speaking at Fine Gael's special parliamentary party meeting in Galway.
Mr Varadkar said, however, that no decision had been made, and there were some issues about the current value of the holding. The State currently holds 25% of the airline.
He said he does not believe the 'strategic' argument for keeping the 25% stake applies anymore. He confirmed that reform is on the way this autumn in his transport portfolio.
He also said the focus will be 'on the aviation side' rather than public transport.
Ryanair said in a statement it would not bid for the 25% stake if the Government indicated that such an offer would be unwelcome. It also said it would work with any new investor and would consider selling its own 30% stake - subject to an acceptable agreement on price.
Analysts said that it may be difficult to find a trade buyer for Aer Lingus as there is a queue of medium sized airlines that may come on to the market soon.
The governments of Hungary, Poland, the Czech Republic and Portugal have all publicly expressed interest in selling their flag carriers.
Earlier, Aer Lingus reported a slight increase in passenger numbers in August, with growth on short-haul routes more than offsetting the effects of Hurricane Irene on its US routes at the end of the month.
Passenger numbers on Aer Lingus flights were up 1.8% from a year earlier to just over one million. When its regional services are included, the increase was 4.1%. Short-haul traffic was up 2.4% to 935,000, but long-haul numbers fell 4% to 95,000.
The total load factor, or percentage of seats filled, edged up 0.4 points from August last year to 86.1%. The figures for short-haul and long-haul were 84.6% and 89.7% respectively.
Aer Lingus said the figures were a continuation of a positive trend noted in its recent results for the second quarter of this year.
For the first eight months of 2011, however, total passenger numbers are down 1.4% from a year earlier, while the load factor fell 2.4 points to 76.1%.
Aer Lingus shares closed 6.3% higher at 67 cent in Dublin this evening.
