Consumers’ Association of Ireland opposes airline sale

The most powerful independent consumer voice in the country has voiced an 11th-hour warning about the future of Aer Lingus, as the Government late last night endorsed the takeover offer by Willie Walsh’s IAG Group.

Michael Kilcoyne, deputy chairman of the Consumers’ Association of Ireland, claimed the Government has totally sidelined the interests of Irish consumers in its dealings with Mr Walsh.

He said that reduced competition will inevitably lead to higher ticket prices at Irish airports if IAG were to succeed in the takeover.

IAG, the owner of British Airways, Spain’s Iberia, and Veuling, the low-cost airline based in Barcelona, currently competes with Aer Lingus on the Heathrow and other routes into Ireland.

Mr Kilcoyne said that the Government is going down the road towards creating restricted competition and repeating the same mistakes as it has made in the banking industry, claiming that a merger between Aer Lingus and British Airways will harm consumers.

“After everything we have been through in banking, we should have learned the lessons about the dangers of concentration,” he said.

The association is the first independent body to voice strong misgivings about the proposed takeover.

Aer Lingus’s trade unions, including Impact, have cited their concerns about reduced competition as part of their negotiations about future conditions should IAG buy Aer Lingus.

Mr Kilcoyne said that the Government’s newly-formed Competition and Consumer Protection Commission ought to open a rigorous examination highlighting the interests of consumers under the proposed deal.

“My main concern is that we are an island nation and the most important issue is entry and departure on the island.

“We are no longer going to have control. We are leaving ourselves in a vulnerable position and the consumer has not been mentioned at all in the deliberations,” Mr Kilcoyne said.

“I can see why unions can get guarantees. But there is no word about what ticket prices will be,” he said.

He said he was surprised by reports that EU competition regulators may likely not oppose any takeover.

Mr Walsh first launched the IAG bid for Aer Lingus in mid-December, and the former boss of the Irish airline subsequently secured the approval of the Aer Lingus board when it increased its offer to €1.36bn, or €2.55 a share.

The Government has sought guarantees about the future of Aer Lingus’s 23 slots from Ireland into Heathrow as part of its talks with IAG. But Mr Kilcoyne said the guarantees were effectively “worthless”.

“How can you guarantee that IAG itself is not taken over in the future. It is after all a stock market listed company,” he said.

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