Aer Lingus Stock Climbs on Pension Deficit-Cut Strategy

Aer Lingus Group Plc climbed the most in more than two months in Dublin trading after proposals to fix a pension hole were less onerous that analysts feared and a report that Ryanair Holdings Plc will be forced to sell half its stake in the company.

Aer Lingus rose as much as 7.7 percent in intraday trading, the biggest intraday gain since March 15, and traded at 1.63 euros as of 10:20 a.m. in Dublin. The company said on May 24 it will consider a Labour Court recommendation that it inject 110 million euros ($142 million) into an industry pension fund.

“The recommendation is well within our 200 million euross worst-case scenario forecast,” said Donal O’Neill, an analyst at Goodbody Stockbrokers in Dublin, with a buy rating on the stock. “Notwithstanding that an agreement will also need to be reached with pilots under a separate scheme, we believe the resolution of this issue will remove a major risk for the company and investors.”

Separately, British regulators may require Ryanair to sell half of its 29.8 percent stake in Aer Lingus, the Irish Independent reported today, without saying where it obtained the information. About 280,000 shares traded hands in Dublin, which