Irish flag-carrier Aer Lingus’ board has unanimously rejected budget carrier Ryanair’s proposal to take over the airline, turning down its offer to pay €2.80 ($3.56) per share.

Aer Lingus is strongly recommending that its shareholders take no action in response to Ryanair’s bid.

“This approach is unsolicited, wholly opportunistic and significantly undervalues the group's businesses and attractive long-term growth potential,” says Aer Lingus Group chairman John Sharman.

“In addition, the offer would raise significant regulatory issues as a result of Aer Lingus Group's strong position in its core markets.”

In a statement the Aer Lingus board adds: “[The airline] is well-positioned to benefit from numerous growth opportunities relating to both its long- and short-haul networks, as a result of its strong market position in Ireland and the depth and experience of its management team.”

Meanwhile Irish unions SIPTU and Impact have strongly objected to the proposed takeover of flag-carrier Aer Lingus by budget carrier Ryanair, claiming that it will reduce competition in the air transport sector.

The SIPTU union’s president, Jack O’Connor, says: “If they can pull off [the takeover] it will enable Ryanair to take out its principal competitor on its main routes, acquire the critically-valuable London Heathrow slots, consolidate market dominance and dictate whatever price they like to airports – with obvious long-term adverse consequences for workers and the travelling public alike.”

SIPTU took a strong stance against the Irish government’s plans to privatise Aer Lingus, and O’Connor says that the Ryanair development vindicates its position.

“Anyone with a titter of wit could have foreseen this development,” he states. “Are we really expected to believe that a highly-resourced state apparatus and the government itself could not have foreseen this sort of development, which a mere trade union like ourselves warned against long ago?

“Ironically we now have a measure undertaken in the name of competition which – if Ryanair pulls off this takeover – will have precisely the opposite effect.

“Whatever else Michael O’Leary is, he is not a fool. Apart from moving to take out the competition, he is also seeking to close off the possibility of another major airline doing so instead. All of this is a consequence of the nonsensical decision to privatise Aer Lingus in the first place.”

While the Irish competition authority says that it is too early to assess the potential effect of a Ryanair takeover of the flag-carrier, the Impact union – which represents pilots and cabin crew at Aer Lingus – says that there are “clearly significant competition issues” involved.

Aer Lingus and Ryanair dominate short-haul operations out of Ireland and Impact claims that the tie-up would create a virtual monopoly.

Impact adds: “The union believes that an independent stand-alone Aer Lingus is in the best interests of the company, the country, passengers and staff. Ryanair has a well-known history of hostility to its staff and shabby treatment of its customers, which is unacceptable to Impact.”

The union also suggests that Ryanair might be trying to “divert” Aer Lingus’ management as the flag-carrier is conducting its own expansion drive.

“Impact calls on the Aer Lingus board to restate its commitment to that expansion programme, which staff have fully supported, and continue work on its implementation,” says the union. “Impact welcomes the government’s statement that it favours competition in the Irish aviation market and that it will not sell its 25% stake in the company.

“However, the union also notes that today’s situation is a direct result of the government’s part-privatisation of Aer Lingus, which Impact and other Aer Lingus unions opposed. This is a very fluid and uncertain situation. Impact will be taking further advice in the coming days and will be keeping its members informed of significant developments.”