Aer Lingus sale could boost public coffers: Ibec
While careful not to endorse a deal before more concrete terms emerge from IAG, Ibec’s director of policy and corporate affairs, Mary-Rose Burke, told the Oireachtas Transport Committee yesterday that there is a risk of looking at the issue without considering the upside potential.
“With regard to Ireland’s public finances, if a formal offer does emerge in excess of €2.50 per share, this would represent more than 60 times the annual dividend paid to the Government over recent years,” she said.
“It would allow for a reduction in borrowing or, preferably, for an increase in capital investment on essential public infrastructure such as land transportation.”
With much of the negativity surrounding connectivity and IAG’s potential long-term plans for Aer Lingus’ Heathrow landing slots, Ms Burke suggested that, as a 25% minority shareholder, the Government already has very little control over the airline’s operational issues.
Earlier, both Enterprise Ireland and IDA Ireland expressed concern to the committee about a potential weakening in air connectivity to and from Ireland.
Ms Burke agreed that concerns over Shannon and Cork must be addressed as part of any deal and said Ibec’s members have voiced concern over the impact of a deal on the national economy, regional development and the public finances.
However, she said, Ibec ultimately views an IAG takeover of Aer Lingus as being “potentially very beneficial”, adding that IAG could use Aer Lingus and Ireland as a springboard for further growth on key North American routes.
“Given the capacity constraints at Heathrow... there could well be scope for IAG to promote Dublin as a secondary hub, thereby growing the amount of traffic and improving Ireland’s international aviation link,” she said.
“We don’t believe that IAG is seeking to buy the company simply in order to strip assets such as landing slots.”
Meanwhile, the British-Irish Chamber of Commerce welcomed the commitments indicated by IAG to securing vital air links within and from Ireland and Britain.
The chamber said the value of weekly trade between Britain and Ireland exceeds €1bn and jobs attributable to that two-way trade exceeds 400,000 split equally between Ireland and the UK.
The fact that the Dublin-London route is the second-busiest route in the world shows the vital importance of unimpeded access to sustaining those jobs and trade, it added.
“The proposed takeover provides scope to further develop Dublin’s ability to grow as a hub; capitalising on existing strong links to regional airports in the UK and the lack of runway capacity at BA’s Heathrow base,” said chamber vice-president John McGrane.
However, Limerick Chamber said that latest additional commitments from IAG do not fundamentally alter business concerns over any potential loss of connectivity at Ireland’s three international airports.
