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Aer Lingus said on Wednesday that Ryanair had increased its stake in the company to about 25 percent, as shares in the airline hit Ryanair's 2.80 euro offer price for the first time since November 9.

«It confirms my own view they are not going anywhere anytime soon,» Aer Lingus Chief Executive Dermot Mannion told The Future of Air Transport conference in London.

Ryanair looks set to lose a takeover bid for Aer Lingus that values the former state airline at EUR1.48 billion (USD$1.95 billion) after a key shareholder block rejected its 2.80 euro a share offer.

But Ryanair has said it plans to remain a long-term investor in its Irish rival and that it could make a fresh bid in a year's time if its current offer fails.

Irish media reported on Tuesday and Wednesday that Ryanair had increased its stake in Aer Lingus to between 25 and 26 percent from 19.2 percent.

Ryanair has yet to confirm the reports, but given the Irish government has said it will not sell its 25.4 percent holding to anyone, the increased stake effectively blocks anyone else from mounting a bid for Aer Lingus.

The stock fell earlier this month after Ryanair Chief Executive Michael O'Leary acknowledged his current offer for a controlling stake was unlikely to succeed given opposition from key shareholders.

Aer Lingus's Mannion also said on Wednesday the airline would present details of its cost-cutting program to unions by the end of this week, and he flagged lower staff costs.

«We will continue to see a downward trend in unit staff costs in 2007 and beyond,» he said.

Ireland's takeover watchdog said last week Aer Lingus must publish the details of a cost-cutting program planned for next year by December 1.

(Reuters)