Privatization of Aer Lingus
"There is very little we can do to protect the Aer Lingus slots at Heathrow Airport," he told the Dail last week.
"At the time of privatisation, having a golden share might have been a good idea -- but there is nothing to prevent the company from leasing out the slots.
"This could be done by the board at any time. The sale of the slots would just require a special motion."
Access to prime-time landing slots at Heathrow Airport is seen as massively strategically important for Irish interests.
Early morning and early evening landing slots at the airport make it easier for firms to do business here -- given that many travellers from the US and elsewhere connect to Ireland from Heathrow.
Aer Lingus is the third-biggest owner of slots at the London airport hub.
"It is clear that airlines across Europe are consolidating. If Aer Lingus has a buyer in the future, probably the best way to secure access to Heathrow Airport is to have a buyer that wants to feed that airport, rather than one that wants to use the slots for another purpose," Varadkar told the Dail.
"It seems that the British government is changing its position on building a third runway at Heathrow Airport, which means we may find there will be more slots in the future than we thought."
Last month Ryanair unveiled a €694m bid to take over Aer Lingus. It is seen as an attempt to increase revenue and get to the long haul market as Aer Lingus has flight to the US East coast.
The Government is planning to sell its 25 per cent stake in the former State airline -- although not, if it can help it, to Ryanair.
However the "anyone but Ryanair" strategy stalled last week as IAG, which owns British Airways, ruled out a bid for Aer Lingus.
Turkish Airlines, which had been linked with a bid for Ireland's former national carrier, also denied suggestions that it was eyeing the stake. Etihad owns a 3 per cent stake.