Aer Lingus turned down a takeover offer from British Airways this week, believing that the proposal significantly undervalued the Irish airline.

The parent company of British Airways, IAG, submitted a “preliminary, highly conditional and non-binding” takeover bid on December 14, the Irish Times reports.

Aer Lingus decided to reject the offer two days later, stating, “The board has reviewed the proposal and believes that it fundamentally undervalues Aer Lingus and its attractive prospects. Accordingly, the proposal was rejected on 16th December 2014.” Shares in Aer Lingus increased following the news.

The airline is on course for a stellar year, expecting its 2014 profits to exceed its nearly $75 million (€61.1 million) surplus from 2013.

Earlier, IAG had shared a statement with the Stock Exchange saying that they had submitted a proposal to make an offer. The Irish Times reports that they also “said there can be no certainty that another proposal or offer would emerge.”

The head of IAG, Willie Walsh, is a former Aer Lingus chief executive.

There is speculation that IAG was especially interested in prime take-off and landing slots at Heathrow Airport currently controlled by Aer Lingus.

In order to succeed, any takeover offer made for Aer Lingus would need the backing of budget competitor Ryanair, which holds a 29.9% stake in Aer Lingus, and of the Irish government, which holds a 25% stake.

Following success of routes to San Francisco and Toronto Irish airline Aer Lings plans to increase capacity in North America.Getty Images