The consortium, which includes US aerospace company Fairchild, New Zealand airport operator Infratil, and a Colorado venture capital firm, Republic Finance, is considered to be a key contender for the business, which could have a value of about 50m.

However, if the consortium succeeds in its bid, it will have to inject a significant amount of money into the business.

The aircraft operation had 2004 revenues close to 140m, while it has also accumulated significant debts, believed to be more than 300m, which the Czech government wants any new owner to shoulder.

The potential acquisition would be a major property play and would enable the consortium to take control of an airfield just 15km from Prague where Aero Vodochody's manufacturing base is.

A redevelopment could establish the base as a lowcost destination, attracting operators such as Ryanair.

There may be questions over whether a flight path to the base would interfere with air traffic to Prague's main airport, Ruzyne. However, Easyjet has previously indicated that it may be interested in operating from the airfield at Aero Vodochody's site.

The Sunday Tribune first reported early in 2004 that an Irish consortium, Cape Clear Aviation, was buying Balaton airport in Hungary. It was upgraded and the group lured Ryanair to the airport, which would have significantly boosted the Irish group's investment.

A similar strategy could be followed by O'Coineen, who is a former Aer Lingus employee, and his partners at the Prague site. Infratil also owns Prestwick airport in Scotland, Kent airport in England and is the majority owner and operator of Wellington airport in New Zealand.

O'Coineen told the Sunday Tribune last week that a decision on the tender for Aero Vodochody, which employs 1,700, is due by March. He added that if it wins the tender, the consortium intends to restructure the business and will continue in aircraft manufacturing.

Aero Vodochody manufactures parts for Airbus, Boeing and Sikorsky, while it also produces military training aircraft that are in use in countries such as Algeria, Hungary and Thailand.

Ryanair founder Tony Ryan also tried to make inroads into Czech aviation. He wanted to acquire a former Soviet airbase about 40km from Prague in 2003 and make it a cargo hub, but the deal fell through.