Aer Lingus is an international airline based in Ireland. Exhibit

Aer Lingus is an international airline based in Ireland. Exhibit 3.28 provides the statement of cash flows for 2007 and 2008, which includes a footnote from the financial statements. 2008 was characterized by weakening consumer demand for air travel due to a recession and record high fuel prices. In addition, 2008 includes exceptional items totaling €141 million, which reflects a staff restructuring program for early retirement (€118 million), takeover defense costs due to a bid by Ryanair (€18 million), and other costs (€5 million).

Required
a. Based on information in the statement of cash flows, compare and contrast the cash flows for 2007 with 2008. Explain significant differences in individual reconciling items and direct cash flows.
b. The format of Aer Lingus’ statement of cash flows is the direct method, as evidenced by the straightforward titles used in the operating section (for example, “Interest paid”). How is this statement different from the presentation that Aer Lingus would report using the indirect method?