Aer Lingus is due to present a report to the Minister for Public Enterprise, Mrs O'Rourke, within the next 10 days, which will outline the options for a strategic alliance for the airline.

The report is expected to argue that an alliance is crucial for the airline's future and to outline the various options in forming such an alliance. Having received the report, the Minister is expected to give Aer Lingus the go-ahead to enter alliance negotiations.

The report is not expected to make a definite recommendation to the Minister on the management's view for the most appropriate alliance arrangement, or to specify its preferred choice of partner. The Aer Lingus alliance is likely to involve an overseas airline taking an equity stake in the Irish airline as a way of providing capital for investment purposes in the years ahead.

Amongst the likely partners is British Airways, itself a member of an international link-up with American Airlines. Aer Lingus is also likely to have discussions with a small number of continental EU airlines including Lufthansa and KLM.