Aer Lingus deal needs ‘cast iron’ pledge

Taoiseach Enda Kenny has insisted that “a cast iron guarantee” on flights in and out of Ireland is needed before a takeover bid for Aer Lingus can be considered by the Government.

Mr Kenny’s comments come as further talks are expected this week between a government review group and aviation giant IAG on the latter’s bid for the airline. But resistance is building within Government around selling its 25% stake in the airline, with demands that IAG outlines how landing slots, particularly in and out of regional hubs, can be protected.

Mr Kenny said: “If IAG are going to come to the table in the next few days, then I need to see, in so far as this is possible, a cast iron permanent guarantee in respect of connectivity for Cork, for Shannon, Dublin and a lesser extent Knock.”

Ryanair, which owns nearly 30% of shares in Aer Lingus, is also expected to comment on its position today when announcing its latest quarterly results. Mr Kenny said he had been contacted by businesses concerned at what would happen if access routes were lost. “I’m also cognisant of the voices of those far more experienced in business than I who say that this kind of guarantee might be difficult to get... We’re in a limited influential position here,” he told RTÉ radio.

Mr Kenny said he was concerned at what may happen after Willie Walsh’s term as IAG boss ends. The Dublin-born executive formerly ran Aer Lingus. “Long after Willie Walsh leaves IAG, what is the position? I’m worried and concerned about the future of the country... Many of the multinationals, exporters look for the future economy, we cannot afford to lose anything that we have,” he said.

However, TDs continue to express concern about the Coalition letting go of its shares without solid proposals from IAG about protecting routes and jobs. Fine Gael and Labour TDs who spoke to the Irish Examiner last night indicated their particular resistance to the bid. Minister of state Sean Sherlocksaid it was vital that slots, particularly in his constituency of Cork, were protected.

“We need to see if a legal guarantee can be bootstrapped onto any offer,” stressed the Labour Party minister.

Fine Gael’s Brendan Griffin said existing relationships between carriers for some hubs, such as in Kerry, may be affected by the IAG takeover. “I’m far from convinced that this has any real merit,” he said.

Galway East TD Paul Connaughton said many in Fine Gael had a lot of concerns. “We need to proceed with caution,” he said.

Former junior minister Fergus O’Dowd said: “The price doesn’t seem to be an awful lot in terms of what the government would get out of it.”