Tourism chiefs oppose airline sell-off

Ireland’s tourism interests strongly oppose the sale of the Government’s stake in Aer Lingus unless the takeover bidders include guarantees to secure the future of Ireland’s regional airports.

Enterprise Ireland and the IDA have also voiced concerns at the proposed sale to International Airlines Group (IAG), parent group of British Airways, but employers’ organisation Ibec believes the sale promises significant benefits for the Irish economy and warns that dismissing it could result in a hostile takeover of Aer Lingus by another airline group.

Appearing yesterday before the joint Oireachtas committee on transport and communications, Irish Hotels Federation (IHF) president Stephen McNally outlined its concerns about the sale of Aer Lingus and the prospect of its Heathrow slots being reallocated to other routes.

“Let there be no doubt about what is at stake,” said Mr McNally.

“Any agreement that fails to safeguard the slots for Irish routes would have enormous implications for the long-term prospects of Ireland’s national tourism product. The future loss of these slots is a very real risk for Ireland given the constraints currently faced by Heathrow Airport, which is now at full capacity.”

IHF chief executive Tim Fenn said: “Any agreement that fails to safeguard those slots for Irish routes would have serious consequences for the future of our tourism product.”

Adrian Cummins, the Restaurants Association of Ireland chief executive, said the five-year guarantee did not go far enough.

Kieran O’Donoghue of the IDA and Niall O’Donnellan of Enterprise Ireland both stressed the importance of Ireland retaining air connectivity to Europe and North America.

“Our companies are very regionally spread throughout Ireland, with the majority of jobs outside Dublin,” said Mr O’Donnellan. “The critical issue is direct access to key markets.”

Ibec, however, stressed the positives that could flow from the sale. While acknowledging legitimate concerns, Mary Rose Burke, the organisation’s director of policy, told the Oireachtas committee the sale could represent a positive economic opportunity for Ireland as a whole.

“The proceeds of a share sale could be put to better use than retaining the shareholding,” she said. “It could allow for a reduction in borrowing and permit spending on essential infrastructure such as land transport.”

Ms Burke added that the fear of jobs losses were based on what happened in Iberia when it was fully merged into IAG in 2011.

“The two situations are not really comparable,” she said. “Aer Lingus has undergone several rounds of rationalisation over the past decade, becoming one of the most efficient airlines in Europe.”

She also warned that if the bid was rejected, the airline could be subject to a hostile takeover in the future which the Government would be powerless to prevent.

The most trenchant opposition to the takeover came from senator Sean Barrett, who said it would be naive to think IAG would protect Ireland’s regional airports while neglecting those in Britain.

“British Airways is Air Heathrow,” said Mr Barrett. “BA is not what Willie Walsh tells you — it’s what it does and what it does is seriously neglect Manchester, Belfast, Birmingham, Edinburgh, and Glasgow.”