The Government has effectively rejected IAG's bid for its share in Aer Lingus.
However, Transport Minister Paschal Donohoe has left the door open for a fresh offer to be made with better guarantees on jobs and Heathrow slots.
Mr Donohoe says improved terms and conditions are needed before the bid can be considered.
He says a guarantee from IAG on the future of the Heathrow slots must be extended beyond five years - something the airline group has previously ruled out.
“The five year period that is there at the moment is not enough," he said. "The reason it is not enough is in order for there to be certainty for investment in those areas, not to mention the tourism sector in that area, they need a longer horizon on which they can plan," he added.
The government has also asked for more information on how many jobs would be lost if the airline is sold, and how quickly new jobs could be created to replace them.
"The Government has today confirmed that it will continue to pursue a policy based on competition between at least two airlines with significant home bases in the Irish market," Mr Donohoe said in a statement.
"The government also considers an open and competitive aviation sector to be the best mechanism to meet the challenges inherent in the aviation industry and strongly supports the maintenance of an open aviation market."
He also said that further consideration of the IAG proposals will be based on "clarity on the overall employment prospects on the basis of the proposals received" and that the government receives " firm commitments and details" on proposals by IAG to grow at Cork and Shannon.
"IAG has indicated that it is proposing to offer legally binding, permanent commitments on the Heathrow slots and term-based commitments on routes. However, the commitment in relation to routes is for five years. The government requires a longer period," the statement adds.
IAG's most recent proposal values each Aer Lingus share at €2.55, comprising an all cash offer for the company of €2.50 per share and a cash dividend of €0.05 per share.
The government has noted the indication of the Aer Lingus board that this is at a level it would be willing to recommend the deal.
Tánaiste under pressure
This morning it emerged that the Tánaiste is under pressure from within her own party to reject the offer.
It is over concerns about the future of jobs at the airline's headquarters and connectivity out of Cork and Shannon Airports.
According to the Irish Independent, a motion opposing the sale will be put to delegates at the party’s annual conference in Killarney.
If Labour members vote in favour of that motion - the Tánaiste will have little option but to reject the bid at Cabinet.
The motion comes amid concern about job losses from the party’s seputies in north Dublin - the home of the airline’s headquarters and majority of its employees; as well as future connectivity for Shannon and Cork Airports.
This morning, Labour's deputy leader said he's "not surprised" by an emergency motion coming before the party's conference this weekend calling on the government to reject the Aer Lingus takeover.
Environment Minister Alan Kelly admits there are 'very strongly-held feelings' about the bid within the party.
He says Aer Lingus's opinion will be taken on board after the airline's incoming CEO said it will need a two billion dollar investment over the next 12 years.
Alan Kelly says Labour TDs will have the chance to air their concerns this weekend.
Meanwhile, Aodhán Ó Ríordáin stated that he had his concerns about the bid and didn't think it was the right decision for the country:
Aer Lingus reports 18% increase in operating profit
Meanwhile, today the airline announced its preliminary results for the year ended 31 December 2014.
They achieved an operating profit performance of €72m which was up 17.8% from €61.1m in the previous year.
Total revenue for 2014 was up 9.2% to €1,556.9m compared to €1,425.1m in 2013.
During 2014 Aer Lingus’ total network passengers surpassed 11 million with average fare revenue per seat was €98.93, up 9.4%.
