Abu Dhabi-based Etihad increases its stake in Aer Lingus to over 4%

Etihad Airlines has increased its stake in Aer Lingus to more than 4 per cent suggesting the Government's 25 per cent stake in the Irish carrier may still be in its sights.

The Abu Dhabi-based airline increased its holding in Aer Lingus from 2.98 per cent to 4.11 per cent in a series of share purchases this month.

Its Aer Lingus stake is now valued at just under €37 million.

An Etihad spokesman said: “Etihad Airways’s stake in Aer Lingus now exceeds 4 per cent following the acquisition last week of further shares on the open market.”

Under Irish Stock Exchange rules, the airline was required to disclose its shareholding in Aer Lingus once it exceeded a 3 per cent threshold.

Etihad is the third-largest airline operating out of the Persian Gulf behind Emirates and Qatar Airways, but it is the fastest growing.

Its minority holdings in several other airlines – which include a 29 per cent stake in Air Berlin of Germany, 24 per cent of Jet Airways of India and 20 per cent of Virgin Australia – have been one of the main drivers of its growth, contributing a fifth of its $6.1 billion revenue last year.

The airline already operates a reciprocal code-sharing agreement with Aer Lingus, but there is mounting speculation it may be seeking a more formal tie-up between the two companies, with the Gulf carrier possibly buying the Government's 25 per cent stake. Minister for Transport Leo Varadkar has, however, indicated he does not favour selling the Government's stake at the present time as conditions were not right for the sale.

Aer Lingus chief executive Christoph Mueller also said last month the Irish airline would be better served by having a mix of smaller investors rather than a few large-scale owners.

If the Government’s stake does not come up for sale, Etihad may consider buying Ryanair’s near 30 per cent holding in Aer Lingus.

Last week, Ryanair lost its appeal against a UK regulator's ruling ordering it to sell most of its 29 per cent stake in Aer Lingus.

The UK’s Competition Appeal Tribunal rejected the airline’s challenge to last year’s competition commission ruling that its shareholding gives it material influence over Aer Lingus and should be cut to 5 per cent.