Aer Lingus rejects bid by Ryanair

London: Irish airline Aer Lingus pledged to be profitable in 2008 and beyond as it set out its defence to the 750 million euros (Dh3.67 billion) take-over bid from Ryanair.

Aer Lingus, already nearly 30 per cent owned by its low-cost rival, said in a statement on Monday the hostile offer significantly undervalued the group and said it could succeed as an independent carrier.

Profit forecast

"Despite...extremely challenging conditions, we expect to achieve profit overall in 2008," Aer Lingus Chairman Colm Barrington said in an open letter to shareholders.

"While maintaining revenue is crucial, we expect that significantly reduced fuel prices and a number of management cost reduction initiatives will enable Aer Lingus to continue to enhance profitability in 2009 and beyond," he added.

Aer Lingus shares were up 1.4 per cent at 1.46 euros by 1152 GMT, still a slight premium to the value of the offer, while Ryanair were down 2.8 per cent.

Ryanair has bid 1.4 euros in cash for the proportion of Aer Lingus it does not already own and wrote to shareholders directly last week.

The offer values the outstanding shares at 525 million euros and the entire airline at 750 million - about half what it offered in an earlier takeover attempt two years ago.

That bid was blocked by the European Commission for being anti-competitive and Barrington said he saw no reason why regulators would think any differently this time around.

Aer Lingus, which said it had net cash of 803 million euros, is also reviving its route from London's Heathrow to Shannon in the west of Ireland. The decision was welcomed by Ireland's Minister for Transport Noel Dempsey.