IAG, which wants to buy the State’s 25.1% stake in Aer Lingus, submitted a proposal to the Government’s review group yesterday that included legally binding commitments.
These included a guarantee that the 23 slots controlled by Aer Lingus at Heathrow cannot be sold, including to IAG airlines. IAG also pledged that Aer Lingus’ name, head office location, or place of incorporation in the Republic cannot be changed and in addition, said it is prepared to offer a further commitment to operate the slots on Irish routes for five years.
According to a source close to the Government’s review group, the proposal would for the first time give Cork and Shannon chambers of commerce, as well as other local organisations, a role in deciding the future of Aer Lingus flights to Heathrow from Cork and Shannon airports.
As it stands, there is no veto power to prevent Aer Lingus leasing one of its Heathrow slots to another airline. IAG’s proposal would guarantee these slots for five years. According to the review group source, the Government could potentially secure a longer guarantee.
The inclusion of local Cork and Shannon organisations in future decision making is an attempt to allay concerns about the future of the prized Heathrow slots.
IAG said it considers Aer Lingus flights from Cork, Shannon, and Dublin as potentially a lucrative source of business for its worldwide network of flights that operate out of Heathrow.
Moreover, IAG chief Willie Walsh said the international nature of the group would see more transatlantic flow through Dublin due to its US immigration pre-clearance facilities.
However, IAG’s commitments did not appease opponents of the takeover bid.
Fianna Fáil transport spokesman Timmy Dooley said: “The offer put on the table this afternoon is more aspirational than it is concrete. In fact, IAG will have no control over any commitments given, if it is bought out by another company, and given that Qatari Airlines recently acquired a 10% stake in IAG, that prospect is a real possibility.
“If it is the case that IAG is the subject of a successful takeover bid, the effective management of Aer Lingus would be transferred to the new parent company and any assurances given by IAG on employment and connectivity would be weakened, or even rendered null and void.”
Impact national secretary Matt Staunton said: “A commitment not to sell the Heathrow slots is no guarantee that the use of the slots wouldn’t change. IAG would be able to change the use of these slots as they pleased, including a transfer of use to another airline, without having to sell them. What really stands out in the statement by IAG is the complete absence of any reference to jobs.”
Jobs Minister Richard Bruton said there was a lot at stake for the Government because all of country’s industries depended on access and connection.
The issue goes before the Oireachtas transport committee today.