Ireland considers selling €89m Aer Lingus stake to cut national debt

Transport minister Leo Varadkar said Aer Lingus is "certainly under consideration" as part of the government's attempts to raise €2bn (£1.8bn) through asset sales as it desperately battles to cut national debt.

"That stake in the past was held for strategic reasons," Mr Varadkar told Irish media on Wednesday. "I don't think that really stands anymore."

Shares in Aer Lingus rose 0.4, or 6.3pc, to €0.675 following the comments, valuing the airline at €357m and the Irish stake at €89m.

The government had considered Aer Lingus's slots at Heathrow airport to be vital to Ireland. However, their importance has diminished because of an increase in direct flights to and from Dublin.

Mr Varadkar said the government will only sell at the "right price to the right buyer", appearing to rule out Ryanair, which owns 30pc of Aer Lingus, on competition grounds.

In a statement, Ryanair said it is "happy to confirm" that it will not bid for the government's stake if an offer would be "unwelcome".

The budget airline said it would welcome "another financially strong airline/investor" in Aer Lingus to help "restore shareholder value". However, it added: "Should another financially strong airline/investor acquire the Govt's 25pc stake, Ryanair would not rule out entering into discussions with that party for the subsequent disposal of Ryanair's near 30pc stake subject to an acceptable agreement on price and maximising shareholder value."