IAG confirms it will not sell off Aer Lingus Heathrow slots

The owner of British Airways has ratcheted up pressure on the Irish Government to agree the takeover of Aer Lingus with the offer of a five year guarantee on crucial Heathrow slots.

IAG confirms it will not sell off Aer Lingus Heathrow slots

The owner of British Airways has ratcheted up pressure on the Irish Government to agree the takeover of Aer Lingus with the offer of a five year guarantee on crucial Heathrow slots.

Willie Walsh, head of the International Airlines Group (IAG), also committed to keep the Irish flag carrier headquartered in Dublin and an agreement never to sell its landing rights at the London airport.

“We are committed to maintaining and strengthening Aer Lingus,” Mr Walsh said.

“We want to develop air services that ensure Ireland’s connectivity is enhanced. In seeking the support of the Irish Government, we propose to offer it legally binding commitments that go well beyond the protections currently available to it.

“These commitments would give the Irish Government an important role that they do not have today in securing the future of Aer Lingus.”

IAG tabled a £1bn (€1.32bn) offer for Aer Lingus last week with the Irish carrier’s board prepared to accept it at €2.55 a share, but the Dublin Government is a significant player in the proposals as it holds a 25.1% stake in the carrier.

Mr Walsh, who initiated a turnaround in Aer Lingus’ fortunes before joining BA, said the original offer highlighted the importance of direct air services and connectivity for investment and tourism in Ireland.

In a follow-up statement to the stock exchange today, IAG said it believes a takeover would secure and strengthen Aer Lingus’ long term future and brand as a member of a successful and profitable European airline group. It said it would offer significant benefits to both the airline and customers.

IAG outlined a series of initiatives it was prepared to put on the table to win the support of the Irish Government.

Among them are a commitment not to sell Aer Lingus’ 23 Heathrow slots, another to keep the Aer Lingus name and assurances that the head office location or place of incorporation would remain in Ireland.

Crucially though, IAG also offered to operate the Heathrow slots on Irish routes for five years – a protection, it said, the Dublin Government does not currently have.

IAG said it plans to operate Aer Lingus as a separate business with its own brand and management and to continue to provide connectivity to Ireland, while allowing it to benefit from being part of the larger airline group.

It said Aer Lingus would be part of the joint business that it operates over the North Atlantic with American Airlines, taking advantage of Dublin’s geographic position.

IAG added: “This is significantly enhanced by US immigration pre-clearance.”

The prospect of a sale is a political mindfield for the Irish Government with an election within a year and a series of Labour Party members – the junior party in coalition – set against a sale unless they see cast iron guarantees on connectivity and jobs.

Currently, Aer Lingus directly employs 3,900 people, mostly in Dublin, with 2,100 of these described as ground staff in areas such as clerical, operative and back office roles.

There are also fears over what a sale would do to the airline’s presence in Cork and Shannon.

Aer Lingus is the fourth busiest operator at London’s Heathrow behind British Airways, Lufthansa and Virgin Atlantic.

The trade union Siptu, which represents more than 50% of the workers at Aer Lingus, called for the sale to be blocked unless they get guarantees.

The Irish Airline Pilots Association, which represents 500 Aer Lingus pilots and owns a 7% share in the airline, said management had a conflict of interest as they stand to make a windfall from any sale.

The trade union Impact, which represents some pilots, cabin crew and ground staff at Aer Lingus, said the acquisition would result in up to 1,200 jobs slashed in Ireland.

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