DUBLIN—Aer Lingus shareholders on Thursday approved the purchase of 12 Airbus aircraft ordered last June, although Ryanair, which has a 29 percent stake in its fellow Irish carrier, voted against.
Aer Lingus, which entered partnerships with U.S. carrier United Airlines this week and with JetBlue in February, hopes the new long-haul aircraft would support its expansion plans, especially on transatlantic routes. "The board believes that the Aer Lingus purchase agreement underpins Aer Lingus' growth strategy," Chairman John Sharman told shareholders at an extraordinary general meeting.
Last month the former state airline said it could not give a profit outlook for this year because of uncertainties about the economic outlook and oil prices.
Chief Executive Dermot Mannion said on Thursday that the uncertainty remained. But he added: "We're cautiously optimistic about managing to grow traffic going forward even in a tough market."
Market Downturn
Ryanair, which has a stake in Aer Lingus following a failed takeover bid, voted against buying the new aircraft, saying that they could have been bought more cheaply.
"This order was negotiated some 12 months ago (May'07), at or very close to the top of the last aircraft value cycle," Ryanair said in a letter to Aer Lingus explaining its vote and seen by Reuters.
"We would strongly urge your Board and Management to cancel and/or renegotiate this order to take advantage of the recent market downturn and the significant reduction in aircraft prices, to secure these same aircraft at significantly lower prices."
The European Commission last year blocked Ryanair's bid for Aer Lingus on competition grounds but subsequently also rejected a request from Aer Lingus that it force Europe's biggest-low cost carrier to reduce its stake.
A European court last month also rejected an attempt by Aer Lingus to issue an interim order blocking what it calls interference by Ryanair.
Aer Lingus, which serves seven U.S. destinations directly, in February started a partnership with JetBlue, allowing Irish and U.S. customers to book a single reservation between Ireland and more than 40 continental U.S. airports. It also signed a codeshare deal with United Airlines, a unit of UAL Corp on Tuesday.
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