Aer Lingus posts 2014 profit rise as IAG takeover falters

DUBLIN, Feb 24 (Reuters) - Irish takeover target Aer Lingus (Other OTC: AELGF - news) reported an 18 percent increase in annual profits on Tuesday as its suitor, British Airways owner IAG, struggled to convince the Irish government to back its bid.

Aer Lingus said 2014 operating profits before exceptional items rose to 72 million euros from 61 million on strong long-haul performance. Revenue rose by 9.2 percent.

Aer Lingus' board last month recommended a 1.36 billion euro offer from IAG (International Consolidated Airlines Group), subject to the Irish state selling its 25 percent stake, but political and trade union opposition has been significant.

Members of the Irish government have cited Aer Lingus' profitability as a reason to maintain it as an independent airline.

Aer Lingus management have countered that a takeover by IAG would boost growth potential and help it fend off growing competition.

"To enhance these excellent results and to accelerate Aer Lingus' growth, it is the board's strong belief that the company should now take the opportunity to combine with IAG," Chairman Colm Barrington said in the results statement.

The statement aid average fares per seat were up 7.2 percent on the long-haul business, compared to an increase in 2.5 percent on short-haul.

The Irish Independent newspaper on Tuesday reported that members of junior government coalition partner the Labour Party were preparing a motion for their national party conference later this week that would block it from supporting the stake sale. (Reporting by Conor Humphries; editing by Jason Neely)