British Airways owner IAG SA is planning to increase its offer for Aer Lingus Group Plc after the Irish carrier rebuffed previous approaches, according to people familiar with the matter.

IAG is considering increasing the proposed offer to as much as 2.50 euros ($2.95) a share as early as this week, though no final decision has been made, said the people, who asked not to be identified because talks are private. London-based IAG said Jan. 9 that Aer Lingus rejected an offer worth 2.40 euros per share, which valued the Irish company at 1.28 billion euros.

Buying Dublin-based Aer Lingus would help swell IAG’s bank of scarce take-off and landing positions at London Heathrow, Europe’s busiest hub, where British Airways is the No. 1 carrier. The Irish airline would add transatlantic flights and help compete with discount airline Ryanair Holdings Plc.

Representatives for IAG and Aer Lingus declined to comment. A representative for Ryanair did not immediately respond to requests for comment.

IAG, which acquired the former British Midland in 2012 to gain slots at Heathrow, would need to broker a deal with 30- percent shareholder Ryanair, which saw its own takeover bids for Aer Lingus blocked on antitrust concerns. IAG would also need to come to an agreement with the Irish government, which controls 25 percent.

“Becoming part of a larger entity could offer medium-term protection for Aer Lingus,” HSBC Holdings Plc analysts including Andrew Lobbenberg wrote in a note to investors on Jan. 7. “With the strongest current trading and most geographic relevance, we think IAG is best placed in Europe to pay for Aer Lingus.”

Aer Lingus shares fell 4.4 percent to 2.39 euros at 1:15 p.m. in Dublin. The stock has risen 31 percent since Dec. 17, the day before the first proposal became public.

–With assistance from Manuel Baigorri in London and Donal Griffin in Dublin.

This article was written by Aaron Kirchfeld, Kari Lundgren and Joe Brennan from Bloomberg and was legally licensed through the NewsCred publisher network.

Photo Credit: An Aer Lingus 737 in flight. Aero Icarus / Flickr