Aer Lingus has suspended all efforts to sell the company due to the imminence of the General Election. The troubled airline had plans to intensify the search for an investor early this year, but an informed figure said this was on hold indefinitely.

The Tánaiste, Ms Harney, said at the Progressive Democrats' conference last weekend that the party would "release Aer Lingus from State control" if re-elected. This is taken by sources as an indication that a sale before the election is not feasible. One source said: "There's certainly an acceptance now that that is the case. The process is simply not a process at all. No process is under way."

While the airlines' unions have not opposed its sale in principle, moves to intensify efforts to secure an investor had been delayed by a strike pilots threatened to call last Monday. The stoppage was averted, but moves to reach final agreements on redundancies and work practice changes are at an early stage. An informed source said the Government had no appetite to embark on a sale in the throes of an election.

There was a perception, the source said, that any dispute over any unresolved element of the rescue plan might blow up in the face of the Government.

In addition, Ms Harney indicated at the weekend that the election would take place in May. That deadline meant there was no prospect of selling the company or a stake in it before a new government takes office.

While a sale has been sanctioned by the Progressive Democrats and Fianna Fáil, observers also stress there is every possibility of a change of government after the election. This would mean the decision to sanction the sale of up to 85.1 per cent of the airline could be reserved.

Even if the Government was returned to power, the summer break will come into play. This means the sale process is unlikely to get under way in earnest until the early autumn at the soonest.

The Government's original decision to sanction the sale of Aer Lingus to the private sector was made in December 1999. The original plan was to float the airline but that plan was called off last year after a series of strikes. When the company's position worsened after the attacks on the US on September 11th, the Government moved to sanction a trade sale. Legislation must be passed before any sale, however.

In addition, the field of potential investors is limited because the company is operating in a very difficult trading environment. Landing slots at Heathrow Airport in London are seen by many analysts as its principal attraction. But the difficult industrial relations at Aer Lingus are seen as a disadvantage to potential investors.