* Shareholder Ryanair says Aer Lingus mishandling pension
* Pension deficit key to sale of govt's 25 percent,
Ryanair's 30 pct
* Ryanair wants no payments to scheme without shareholder
(Adds no comment from Aer Lingus)
By Conor Humphries
DUBLIN, Sept 16 Europe's largest budget airline
Ryanair criticised on Friday the management of rival Aer
Lingus , in which it holds a 30 percent stake, over its
handling of a huge pension deficit widely seen as an impediment
to attracting a strategic investor.
Dublin-based Ryanair called on Aer Lingus, which has said it
fears industrial unrest over the pension deficit, to refrain
from making payments to the pension scheme without shareholder
A spokesman for Aer Lingus declined to comment on Ryanair's
Aer Lingus in August said it had no obligation to fund a
shortfall of approximately 400 million euros ($554 million) in
an employee pension scheme, but warned that this position could
be open to a legal challenge.
The deficit is larger than the company's market
capitalisation of 353 million euros.
The Irish government is considering the sale of its 25
percent stake in Aer Lingus but uncertainty over the pension
deficit is seen as a hurdle.
Ryanair has twice had takeover bids for Aer Lingus rebuffed
amid competition concerns and has said it may sell its stake in
the former state carrier to an investor who buys the government
Analysts say the question mark over the pension scheme has
significantly depressed Aer Lingus' share price, which has
fallen by 43 percent since the start of the year.
Ryanair in a statement criticised past payments to the
pension scheme, an employee shareholder scheme and to the
government over unpaid taxes from an employee redundancy
Ryanair's outspoken chief executive Michael O'Leary has been
a long-standing critic of Aer Lingus.
"Ryanair believes that other Aer Lingus shareholders will
share its shock and dismay at recent payments by the Board of
Aer Lingus without any approval from shareholders," Ryanair said
in a statement.
"The Board and Management of Aer Lingus should now end this
pension uncertainty by confirming that they will not make any
further payments to these defined contribution pension schemes
over and above current (direct contribution) rates without the
prior approval of shareholders," it said.
($1 = 0.722 Euros)
(Editing by Hans-Juergen Peters)