Leo Varadkar, the Irish minister for transport, has dismissed reports that JetBlue could buy a stake in Aer Lingus.

Varadkar said he was not aware of any plan to sell the government's 25% stake in Aer Lingus to the U.S. carrier. He also said he did not think JetBlue would have much free cash to buy a stake in Aer Lingus.

Varadkar said the Government had not named a price for its stake and the issue was to get an appropriate buyer at the best possible price. But he said the hole in the pension fund would have to be sorted out first. Varadkar also said the government expected a dividend from Aer Lingus this year.

A report in Monday’s Irish Times said Aer Lingus's senior management team had held talks with JetBlue Airways. The paper quoted "informed sources" as saying that JetBlue was Aer Lingus management's preferred trade investor.

Aer Lingus and the U.S. airline are already connected by a sales agreement launched in April 2008.

This allows Aer Lingus passengers flying into Boston and New York to connect with JetBlue's services to 37 destinations in the U.S.

In a note on the reports, Goodbody analyst Eamonn Hughes said it added one more name to the pot of potential interested parties.

But he said revelations that talks on the Aer Lingus pension deficit are likely to extend into the second half of the year are likely to keep any talks about a trade investor "in check."

According to The Irish Times, “The government’s stake in Aer Lingus is worth ***116 million, which would be within the scope of JetBlue’s resources.

“While the sale of the state’s stake in Aer Lingus is entirely a matter for the government, the airline’s management would hope to play a role in where it is placed.”