Aer Lingus chair says bankruptcy claims "rubbish"

DUBLIN (Reuters) - Aer Lingus (AERL.I) Chairman Colm Barrington on Sunday rejected as "total rubbish" a claim by Irish rival Ryanair (RYA.I) that the former state airline faced bankruptcy within about 18 months.

"Talking about Aer Lingus being out of money, being bankrupt in 18 months -- total, total rubbish," Barrington told state radio RTE in an interview.

Ryanair has lodged formal complaints with UK and Irish financial authorities alleging Aer Lingus misled the market by presenting overly optimistic guidance last year in its defence against a hostile bid by Ryanair.

After Ryanair withdrew its bid this year Aer Lingus reversed its earlier forecasts for a profit in 2009 and Barrington on Sunday reiterated the carrier's operating loss would widen this year compared with 2008.

He said he could not provide exact guidance.

"Things are quite tough out there, so it's very difficult to predict what the full year is going to be right now," said Barrington, who is acting in an executive capacity after the resignation of Dermot Mannion as chief executive last month.

Barrington also rejected a claim by Ryanair Chief Executive Michael O'Leary that Aer Lingus was burning through its cash reserves fast.

Aer Lingus had 1.2 billion euros (1.1 billion pounds) in the bank, which after deducting net debt of 600 million euros still left it with net cash of 600 million, Barrington said.

"We're not actually eating up all those cash reserves," he said. "Michael O'Leary might like to say that, but that's actually not true."

Barrington said Aer Lingus, in which Ryanair already holds an almost 30 percent stake after an earlier bid, would work to improve profitability, partly by further reducing its fleet in line with market conditions.

(Reporting by Andras Gergely, editing by Will Waterman)