The transport minister says IAG's bid to buy Aer Lingus appears to be a so-called "friendly acquisition".
Representatives from IAG met with Government officials yesterday to discuss the issue and are due to meet again next week.
Concerns about jobs and connectivity remain and it's understood any new approach by IAG will have to address these issues in order to convince the coalition to sell the State's 25 percent share in the airline.
Transport minister Paschal Donoghue says so far the Government's engagement with IAG has been positive:
The news comes as Aer Lingus announced that traffic on the airline and its regional subsidiary fell by 2 percent in February - it carried 627,000 passengers, down from 640,000 in the same month in 2014.
The airline's mainline traffic fell by 0.9 percent to 553,000.
Long haul business rose by 21.7 percent to 56,000 from 46,000, but its larger short haul business took a hit, down by 2.9 percent to 497,000 - a drop of 15,000.
