February 17, 2011
By Staff Reporter
The Irish government, which holds the company on behalf of the public, plans to float up to 75 percent of the airline in September, but the executives tasked with the Initial Public Offering (IPO) have not announced a precise date.
Sources said last night the draft prospectus was already prepared, and would be put before potential investors within two or three weeks. This would leave another two or three weeks to the actual flotation.
Shares in the company will be available on the Dublin and London stock exchanges. Although there is likely to be some interest from the United States in the airline, there are no plans to list on the New York stock exchange.
There has been speculation amongst analysts that the company will have a market capitalization of around $1 billion.
The airline last night stressed that the current security alert and the alleged plot to bomb several transatlantic flights last week would not derail the IPO. Last weekend, Aer Lingus chief executive Dermot Mannion said the bomb scare would not damage the airline’s financial position.
“We do not expect there to be a material revenue loss by the time all the figures are counted. We are very much back to normal. Overall, the revenue fall is not significant,” he was quoted as saying in The Sunday Business Post.
Mannion added that insurance premiums had not increased following last week’s security scare, but admitted Aer Lingus’ plans to charge extra for checked-in luggage may have to scrapped if the restrictions stay in place.
“There is no evidence to suggest that there is an increased security risk associated with Ireland or any of the Irish airports,” he added.
Aer Lingus is anxious to raise the cash from a flotation in order to fund ambitious expansion plans. These are expected to coincide with an “Open Skies” agreement between the United States and the European Union, lifting restrictions on carriers on both sides of the Atlantic. This would allow Aer Lingus fly directly to more airports in the U.S.
It would also mean the end of the “Shannon Stopover” rule, detested by many travelers, which forces half of all planes serving Dublin to make a stopover in Shannon.
Meanwhile Michael O’Leary, the chief executive of Ryanair, Europe’s leading low-cost carrier, has said he will ?put the squeeze? on Aer Lingus during and after the IPO.
O’Leary was quoted as saying he intended to “have a lot of fun” at the time of the Aer Lingus flotation.
“It is an opportunity when Aer Lingus has to lift its skirts in an IPO prospectus about what their traffic is and their market share. People are going to see how irrelevant it is in this country,” he added.
O’Leary, who has a reputation for adopting an aggressive approach to all rivals, also predicted that Aer Lingus’ “yields are going to get slashed” as Ryanair captures market growth.