LONDON, England (CNN) -- Irish carrier Aer Lingus announced Monday that its chief executive, Dermot Mannion, has stepped down with immediate effect.

Aer Lingus has been fighting off a takeover bid from rival Irish carrier Ryanair.

The airline confirmed that its board accepted the decision and has started the search for a successor.

Aer Lingus, whose shares have lost 65 percent of their value in the past year, has been locked in an often acrimonious takeover battle with fellow Irish carrier Ryanair, which owns 30 percent of its rival.

In December Ryanair offered to pay $1.78 (€1.40) a share -- or $950 million in cash -- for the remaining 70 percent of Aer Lingus, a 28 percent premium over the current stock price. But Aer Lingus' board rejected the offer and urged shareholders to take no action. It said the offer "significantly undervalued" the 73-year-old airline.

Aer Lingus chairman Colm Barrington, who has assumed overall responsibility for the airline in the interim period, said in a statement: "On behalf of the board and management team, I would like to thank Dermot for his significant contribution to the Group over the past four years. We would like to record our appreciation for his loyalty and dedication to Aer Lingus."

He added: "Against the backdrop of challenging market conditions, the board and management team are focused on maximizing revenues, reducing operating costs while maintaining a strong balance sheet to deliver value for all shareholders."

Mannion himself thanked the board and management in the same statement before adding that his decision to step down would "allow a new CEO to bring fresh thinking and new ideas to the business."

If Ryanair does eventually gain control of Aer Lingus, it would mark the first time one of Europe's "legacy" -- or formerly state-owned -- carriers had fallen under the control of a low-cost pioneer.

Ryanair founder Michael O'Leary has said in the past that his airline will grow from being Europe's largest low-cost carrier to become the region's biggest carrier full stop as it takes on the so-called legacy airlines.

Many of those, including Italy's Alitalia, Greece's Olympic and Aer Lingus have wilted under the pressure of Europe's widely successful no-frills airlines.