Aer Lingus denies merger talks

AER LINGUS said it never held merger talks with Air France despite mounting speculation that meetings between the airlines have taken place.

Industry sources said a reason for Mr Mannion’s departure as chief executive was because a merger between Aer Lingus and Air France was imminent, which he has always opposed.

One source said meetings between senior management of Air France, which is Europe’s biggest airline, and Aer Lingus were held in Paris just over two weeks ago.

It is understood the Government and shareholders including the ESOT and pilots were expected to be asked to back the deal where Air France would become the majority shareholder in Aer Lingus.

According to the Financial Times yesterday, the Aer Lingus board is consulting with Goldman Sachs, its financial adviser, on strategic options which could include the opening of alliance talks with one or all of Air France, Lufthansa and British Airways.

The airline’s chairman and now chief executive, Colm Barrington, said late last year that the airline vowed to find a “friendly investor who will take a majority stake in the airline”. He also said that from a “consumer point of view” and a “country point of view”, Air France “would be a better option than Ryanair”.

Former Aer Lingus finance director Brian Dunne emerged yesterday as the leading contender for the chief executive role. Mr Dunne is understood to be back in Ireland, having worked as chief financial officer with Air Canada.

Assistant chief executive Niall Ferguson and chief financial officer Sean Coyle are the leading internal candidates tipped to succeed Mr Mannion.

Meanwhile, figures released by Aer Lingus yesterday showed the total number of passengers carried fell by 7% to 835,000 in March and a 13% drop in traffic, compared with the year earlier period.

In addition, Air France said passenger traffic slumped for a third consecutive month in March and average ticket prices dropped as the global recession hampered demand. Air France carried 5.6 million passengers in March, a 9.8% drop from a year earlier. Capacity declined 2.9%, bringing the load factor down 5.5% to 75.5%.

“Certainly the traffic numbers we have seen have been pretty disappointing,” said Douglas McNeill, an analyst at Blue Oar Securities. “It’s also a concern as some airlines are reporting this was a notably week month for yields as well.”

Elsewhere, Ryanair said it is to offer nine routes from Dusseldorf Weeze airport starting in July.

Aer Lingus’s share price was down 2.7% to 70 cent yesterday, while Ryanair was down 3.7% to e2.57.


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