Aer Lingus has begun its search for a new group chief executive as Mr Bernie Cahill steps in as executive chairman at a very sensitive time for the State-owned airline.

Mr Cahill, who has been chairman of the group since 1991, took over the running of the airline yesterday. His move follows Wednesday's announcement that group chief executive, Mr Gary McGann, was leaving the airline to become chief financial officer of the Jefferson Smurfit Group.

Mr Cahill will run the Stateowned group until a replacement is found for Mr McGann. In a statement, Aer Lingus said: "Mr McGann relinquishes his executive responsibilities with Aer Lingus immediately."

An Aer Lingus spokesman said that, following a discussion yesterday morning between Mr Cahill and the Minister for Public Enterprise, Ms O'Rourke, Mr Cahill agreed to take up the position. The board of Aer Lingus did not meet to discuss the situation, he said. In 1993, Mr Cahill took over as executive chairman when the then chief executive, Mr Cathal Mullan, stepped down. He remained in place until 1995 when Mr Peter Owen was appointed to the post.

No timescale has been set for the appointment of a new group chief executive. But the Aer Lingus spokesman said: "No time will be wasted in getting the process under way." Sources speculated that the new chief executive could come from the group management team, which has been strengthened in recent years.

Among the names mentioned yesterday were marketing director, Mr David Bunworth (48), who joined Aer Lingus from SmithKline Beecham and group finance director, Mr John O'Donovan (46), who came from Carbery Milk Products.

Smurfit president and chief operations officer, Mr Paddy Wright, a director of Aer Lingus, offered to resign from the airline board because of the appointment of Mr McGann to Smurfit.

Asked about the poaching of the State sector executive by a group which has two Government-appointed directors on the Aer Lingus board, a Smurfit spokeswoman said Mr Wright had offered his resignation to Mr Cahill. It was not accepted, she said. When Mr McGann's decision to move to Smurfit was announced on Wednesday, it was stated by both Aer Lingus and Smurfit that his new position would "take effect on the basis of an agreed timetable". Aer Lingus indicated that Mr McGann was prepared to remain in place until the midsummer to facilitate the appointment of his replacement.

But within hours of the announcement, the SIPTU trade union had called on Mr McGann to "move on immediately", describing his position as "untenable".

And, speaking on RTE's Morning Ireland yesterday, Ms O'Rourke said that it would be best for Aer Lingus if a replacement were found quickly for Mr McGann.

The apparent abruptness and inappropriate timing of Mr McGann's departure after almost four years with Aer Lingus came as a surprise. Some sources contended that it could be an indication of tensions between Mr McGann and Mr Cahill. It is understood that Mr McGann had made no secret in recent months of his desire to return to the private sector.

It is understood that the announcement was not due to be made for a number of weeks. But when the information leaked out, both companies confirmed the situation. One source said Mr Cahill had taken the right decision in replacing him immediately once the announcement of his intended departure had been made.