It is reported that the International Airlines Group (IAG) will increase its takeover bid for Aer Lingus after the carrier rejected its latest offer.

Bloomberg says the group, which owns British Airways, will offer as much as €2.50 a share.

That is an increase of 10 cents on their previous offer.

Aer Lingus has turned down two other bids, which valued the company at €1.28bn.

IAG commented on the proposed deal back in December, saying: "There can be no certainty that any further proposal or offer will be forthcoming. A further statement will be made if and when appropriate."

The airline announced back in November that the third quarter of last year was its most profitable quarter since Celtic Tiger years.

While its operating profit was up 19% on the same period in 2013.

Aer Lingus shares have gone up 31% since mid-December - the day before the first proposal went public.

The fate of the carrier will ultimately be decided by its two main shareholders - Ryanair, who has a 29% stake in the company, and the Irish government who owns a quarter.