Etihad is said to be interested in buying out the Ryanair stake in Aer Lingus.

The low-cost airline currently holds a 30% share of the Irish national carrier.

It is reported Aer Lingus are happy about the proposal by Etihad who already hold a 3% share in the airline.

According to online news service Bloomberg the Middle East carrier is also in discussions to buy out the governments 25% holdings.

The two airlines signed a code-share agreement at the end of July.

Etihad bought the 3% stake back in May to help the Abu Dhabi flagship carrier gain more European routes.

The agreement also gave Aer Lingus access to the Etihad network in the Middle East, Asia and and Australasia.

However Newstalk Business Editor Ian Guider told Breakfast there is a limit to the amount of shares Etihad can hold.