The Irish government on Tuesday decided to sell off of most of Aer Lingus through an IPO nearly a decade after it first announced its intention to privatize the carrier, but said it will retain a stake of "at least 25.1%.""The transaction is taking place in order to give Aer Lingus both the commercial flexibility and the financial muscle to compete and succeed in the global marketplace," Transport Minister Martin Cullen said in a statement.

The government opted to float the airline on the stock exchange instead of selling it outright, although it did not disclose when the transaction will take place. Last month, Aer Lingus management urged ministers to proceed as soon as possible, preferably before summer (ATWOnline, March 15). "It's not for the government to notionally or artificially pick a date at this stage. The process is now under way, and will be the same as exacted in any company in the private or public sector," Cullen said, adding that advisers will "immediately start work on the sale."

To appease unions likely to object, the government said it instructed Aer Lingus management to negotiate with labor on a package of measures prior to the IPO. These include issues such as job security, pensions and possible future dilution of employee shareholdings