A public share offering is the most likely way Aer Lingus will raise the cash it needs to invest in new fleet, its new chief executive, Mr Garry Cullen, said yesterday. He also warned that the airline was facing "dramatic changes" and would need to become part of a major alliance if it was to grow.

"We cannot survive and prosper by just marketing our own network," Mr Cullen said. The airline will invest £250 million in upgrading and improving its own facilities over the next five years. It will also begin implementing a £50 million cost saving plan later this year. Although the airline does not need capital until around 2001 for new fleet investment, Mr Cullen acknowledged floating part of the company was the most likely way to raise it.

Speaking on his first day in his new role, Mr Cullen said his job was to give leadership and to keep focus on the company's development plans.

Mr Cullen said that a new equity investment could come from a new strategic alliance partner, but not necessarily so. He also said he would favour giving staff some share in the company. Employees already hold 5 per cent. Mr Cullen said employees were being asked to undertake huge changes. Employees needed more than just salaries to motivate them.

A crucial part of the airline's future is to find an alliance partner. Mr Cullen admitted that Aer Lingus was most likely to end up part of one of what is known as the Big Four major alliances.

One of these includes British Airways and American Airlines and is seen as a good option for Aer Lingus. The idea behind a strategic alliance is that an airline, through its partners, can offer far more destinations and more attractive promotional fares than by staying on its own.

Mr Cullen pointed out that if Aer Lingus did not become part of an alliance, there was a danger that it would be frozen out by those in alliances.

Mr Cullen said a new partner must have strong connections in North America. He said yields from the British and European routes were static, but very profitable on the transatlantic route. Aer Lingus wants to be able to offer further destinations to its customers in North American and Canada. This could be done through interlining with a US carrier.

Mr Cullen said the airline and Ireland would be marketed everywhere, through whatever alliance it joined.

"Not in its wildest dreams could Aer Lingus afford that kind of marketing worldwide," he said.

Mr Cullen also stressed that Aer Lingus had a strong brand name, with a reputation for good service, reliability and punctuality. It would be careful to ensure that whatever alliance it joined would not damage the brand.

He said Aer Lingus would bring a recommendation to Government on the alliance in six months. Talks are to begin next week and it is understood the airline has already had approaches from interested parties.