European affairs minister Dara Murphy has called on his government colleagues to stand over previous commitments to protect connectivity from Irish airports in light of IAG’s potential takeover of Aer Lingus.
The Cork North-Central TD said that, as London Heathrow represents the country’s most important connection to Europe, he is strong in his support of previous government indications its 25% shareholding would be used to protect competitiveness and connectivity in the Irish market.
Concerns were raised in recent days by a range of business leaders and opposition TDs over the potential loss of London Heathrow slots for Cork Airport in the event of IAG submitting a successful bid for the former national carrier.
The absence of transatlantic flights from Cork has also been flagged as a potential strategic disadvantage for the airport, in comparison to Dublin and Shannon.
Having US customs pre-clearance is a major benefit for Dublin and Shannon airports, with the capital’s airport, in particular, seen as a potential transatlantic hub for IAG which is in desperate need of further expansion potential given capacity issues at Heathrow.
In comparison to Shannon and Dublin, Cork Airport’s strategic value is somewhat less clear, according to industry experts.
A successful IAG takeover of Aer Lingus would likely see existing long-haul services from Dublin and Shannon expanded, but short-haul routes could face a less certain future if not evidently profitable, according to Davy Stockbrokers aviation expert Stephen Furlong.
“If the deal goes through, I would see the Irish airports, particularly Dublin, used for long-haul… I think they [IAG] would invest and develop the transatlantic hub, particularly out of London, maybe some from Shannon as well. In the main, what they would look at is they would grow the long-haul business more and then they would have to look at the short-haul business and it would be on a case-by-case basis,” said Mr Furlong.
The Davy analyst said he didn’t believe IAG would reduce connectivity to and from Irish airports should they acquire the Heathrow slots, worth an estimated €400m.
Other industry sources said IAG would be unlikely to announce transatlantic services from Cork should a bid for Aer Lingus be accepted.
A return of the Cork-to-Dublin route would, however, offer a valuable link to transatlantic flights from the capital, sources added.
Dublin’s attraction as a “spill-over hub” which would effectively act as a third Heathrow runway for IAG, is clear, Mr Furlong said, adding that with most of the group’s growth likely to come from Iberia rather than British Airways, expanding Aer Lingus’s growing transatlantic services offers a clear growth angle.
Mr Murphy said that transatlantic flight was also viable from Cork and he is aware of ongoing negotiations with US airlines to attract such services.
The junior minister also called on the Dublin Airport Authority (DAA) to invest heavily in a regional marketing campaign to broaden the airport’s catchment area and reverse the trend of falling passenger numbers.
A third IAG bid is widely expected in the coming days or weeks and will likely be a recommended offer at a price “not materially above €2.50”, Mr Furlong said.
© Irish Examiner Ltd. All rights reserved