IRELAND - Aer Lingus pensioners face losses of nearly €5m as a result of action taken by the Irish Airline Pilots Pension Fund to block a hostile takeover by Ryanair.

The fund bought more than 10 million shares in Aer Lingus last year in an attempt block Ryanair chief executive Michael O'Leary's bid for the Irish airline.

At the time, the Pensions Board sent the fund a warning letter reminding the pension fund of the need to invest prudently.

Last week, the European Commission vetoed the Ryanair bid on the grounds it would reduce competition.

However, following a fall in share value, the pension fund is now facing a loss of €3.6m based on Friday's share price of €2.69.

Tailwinds Nominees, the association of pilots who also bought shares in the carrier to help build a blocking stake, faces a loss of just under €1.4m.

A declaration on the Irish Stock Exchange (ISE) reveals the fund bought 9,824,765 shares on 10 October at the height of the market, when the shares were trading at €3.04.

During the following week, another 800,000 shares were purchased on three separate days at prices between €2.87 and €2.92.

Tailwinds Nominees had 2.8 million shares before the bid was announced by Ryanair. The association bought an extra 6.1 million shares at €2.90 on October 23 and a further 695,000 for €2.84 on October 24, according to the ISE.

Mary Hutch, head of information and training at the Pensions Board, said: "The shares are down today but stock markets are volatile and one would hope for a reversal of fortunes in this case.

"Obviously trustees have to invest with the members interests in mind and we have always said that and will continue to reinforce that message to trustees of any scheme in this country."

Aer Lingus referred IPE to the pension fund, however a spokesperson for the pension fund refused to comment.

Evan Cullen, president of the Irish Airline Pilots Association (IALPA), the trade union for civil pilots, said while the Aer Lingus pilots were members of the association, IALPA had no input in the pension fund's investment decisions.