Ryanair is ready to take control of Aer Lingus if the cash-strapped Irish government puts its stake in the airline up for sale.

Undaunted by two failed takeover bids for Ireland‘s flag-carrier, Europe’s largest short-haul carrier said it would be “open” to talks with the new Fine Gael administration about buying the state’s 25% shareholding in Aer Lingus, which added to the 29.8% it already holds would give Ryanair a majority stake. The new overture came in the wake of last month’s government report that recommended selling the state’s stake.

A Ryanair spokesman said: “If the government were selling state assets and it approached us to discuss the sale of the Aer Lingus stake we would be open to that.”

However, the spokesman said the Dublin-based carrier was not working on a third takeover bid, having been rebuffed in previous attempts in 2006 and 2008, and had not discussed a takeover in recent meetings with government officials. The European commission has backed the Irish government’s warning that a takeover would be bad for consumers and blocked any deal between Ryanair and Aer Lingus, arguing that 14 million passengers a year would be hit by higher fares.

Last month’s report by economist Colm McCarthy listed the stake and Dublin’s bus network among the state-owned assets that could be sold, raising €5bn (£4.5bn) and helping pay back a €85bn bailout by the European Union and the International Monetary Fund. Leo Varadkar, the Irish transport minister, said that in the event of a disposal the government would consider protecting Aer Lingus’s slots at Heathrow, which are viewed as a vital link to Dublin. However, this week he reiterated the government’s opposition to a deal with Ryanair. McCarthy has also given the government some breathing space after advising against an immediate “fire sale” of assets.

Market watchers downplayed Ryanair’s renewed interest. Andrew Lobbenberg, an analyst at Royal Bank of Scotland, said that as well having a negligible impact on Ireland’s debt burden, any stake sale to Ryanair would be blocked by the government or the EC. “We think the Irish government will tell them to go away – merging the two would hand Ryan significant influence over air transport, airports and tourism to and from Ireland. If the Irish government were to say OK, we are interested in selling to Ryan, then we think the EU competition authorities would once again look to block the deal.” The Office of Fair Trading has also launched an investigation into Ryan- air’s Aer Lingus shareholding.

Last year Aer Lingus swung from a pre-tax loss of €154.8m in 2009 to a profit of €30.4m, but warned that “significant challenges” in 2011 from higher fuel costs could hit profits in 2011. Ryanair is a substantially larger business, carrying more than 70 million passengers per year compared with less than 10 million at Aer Lingus and reporting a pre-tax profit of €354.5m last year.

Aer Lingus argues that the Ryanair stake is an obstacle to growth because it deters the likes of British Airways from acquiring a shareholding. Christoph Mueller, Aer Lingus’s chief executive, said the 29.8% stake effectively worked as a “poison pill” in warding off interest from other airlines and would complicate any attempt to join one of the three global airline alliances.

Aer Lingus declined to comment.