Aer Lingus is considering an improved 1.36 billion euro ($1.52 billion) takeover proposal from International Consolidated Airlines Group (IAG). As Hayley Platt reports it's the third attempt by the owner of British Airways to buy its Irish rival.
It could be third time lucky for IAG. International Airlines Group, the parent company of British Airways has made a new improved offer for its Irish rival Aer Lingus for 1.36 billion euros. The news gave IAG shares a boost of almost 4 percent. And Aer Lingus more than 1 percent. The new offer is worth 2.55 euros a share, up from 2.40. Crucially the purchase will give British Airways valuable extra take-off and landing slots at London's Heathrow airport - its European homebase. And extra routes into Europe and the Far East. But how will it go down with its two biggest shareholders, budget airline Ryanair and the Irish government? BGC's Mike Ingram. SOUNDBITE: Mike Ingram, markets analyst, BGC Partners, saying (English): "Ryanair who maintains a very significant stake in Aer Lingus probably only really cares about the price ultimately. The Irish government also holds a blocking minority, they are a year away from an election so it is probably going to be a bit of a political hot potato and certainly the Irish government is going to be seeking employment guarantees." Dublin had wanted to sell its 25.1 percent stake in the airline back in 2010 as part of the country's bailout. But it didn't and is now facing mounting political pressure not to. Ryanair, with an almost 30 percent stake, says it will consider any new offer. The deal is still subject to approval from the Aer Lingus board. And IAG's clearly hoping it will go through this time. It's competing with cities across the globe who are busy building new runways to keep up with growing demand for air travel.