Ryanair ‘taking the lead’ on sale of Aer Lingus

Political controversy surrounding the proposed €1.34bn bid for Aer Lingus by Willie Walsh’s International Airlines Group has heated up after Fianna Fáil questioned whether the Coalition is allowing Ryanair to take the lead on the sale of Aer Lingus.

Ryanair ‘taking the lead’ on sale of Aer Lingus

Fianna Fáil referred to remarks attributed to Tánaiste Joan Burton this week where she was reported to have said that how Michael O’Leary’s airline approaches the matter would be key to any decision the Government may take.

Ryanair owns almost 30% of Aer Lingus and it has been reported that the Cabinet will decide on any takeover only when Mr O’Leary’s airline makes its position clear.

Fianna Fáil transport spokesman Timmy Dooley yesterday said that it was not acceptable that the Government would let a commercial decision dictate what happened to the State’s 25% investment in Aer Lingus.

“It is very disappointing to hear that Labour and the Cabinet are prepared to take their cue on Aer Lingus from Ryanair. Not only is Ryanair a competitor of Aer Lingus, it is a major shareholder and will make its decisions based on commercial interest, not national interest,” Mr Dooley said.

The political attack comes as Mr Walsh, on a visit to Dublin yesterday, insisted that IAG remains “perfectly relaxed” about the Government’s prolonged review and will wait for its decision on the bid.

He cited stock market Takeover Panel rules for his unwillingness to comment on aspects of the takeover.

Mr Walsh said IAG, which owns British Airways and Iberia, would be a very good partner for Aer Lingus in helping boost its transatlantic business. He said this is because Aer Lingus’s pre-clearance facilities for US customs at Shannon and Dublin Airports provide a huge advantage that other airlines do not have.

He told reporters: “We’ve always said that the US represents a great opportunity not just for IAG but Aer Lingus, given the network that they have developed and the benefit of having a pre-clearance facility at Dublin and Shannon Airports, clearly an advantage that no one else in Europe has, and we believe that that is an advantage that can be built on.”

Analysts have said the takeover could face political opposition from the mid-west region, which is seeking to ensure the future of the Heathrow link from Shannon Airport if IAG were to succeed to buy Aer Lingus.

Mr Walsh said he was encouraged by economic growth in Europe, but insisted that Ireland’s economic recovery was not the rationale behind wanting to buy Aer Lingus.

“To be fair and to give credit to Aer Lingus, they have done a very, very good job in a difficult economic environment. So it demonstrates it is a very well-run company,” he said.

Fianna Fáil, however, said the Labour Party should be making its decisions as part of the Government in the long-term interests of the country and shouldn’t be waiting to a get a steer on what direction it should do from Ryanair.

“The future of the State’s shareholding in Aer Lingus and the long-term economic considerations should not be guided by a rival airline with a vested interest,” Mr Dooley said.

“Either the Government has genuine concerns or it doesn’t. What Ryanair’s intentions are should be irrelevant to those concerns if they are genuinely held.”

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