‘Airline buyout makes sense’

The proposed takeover of Aer Lingus has been boosted after the airline’s board insisted the buyout made compelling commercial sense.

The move by Aer Lingus directors — who are not yet in a position to back the €1.36bn move for the carrier from British Airways parent group IAG because no formal bid has been launched — reignites the political fire over the airline’s future.

Aer Lingus chairman Colm Barrington said the link-up would make Ireland a hub for connections, and boost transatlantic traffic.

“The board’s view is that a combination of Aer Lingus with IAG has a compelling strategic rationale and will deliver significant benefits for Aer Lingus, its employees, its customers, and for Ireland,” he said.

“The strong view of the board of Aer Lingus is that the prospect of Aer Lingus being part of the IAG Group has a compelling commercial logic for Aer Lingus, has significantly positive benefits for Ireland and is strongly supportive of the Irish Government’s two-airline policy.

“Following a combination with IAG, Aer Lingus will have a markedly greater number of more attractive growth options that will significantly benefit the company, its employees, its customers, the tourism sector, Irish business and industry, and the airports at which Aer Lingus operates and Ireland.”

The Government is wary of selling its 25.1% stake in Aer Lingus in the run-up to the next general election, with Labour in particular fearing the impact of job losses related to any take-over.

IAG chief Willie Walsh has launched a PR blitz in recent days to try and gain political support for the bid.

Mr Walsh told the Oireachtas transport committee that IAG would guarantee Heathrow slots from Dublin, Cork, and Shannon for five years after a takeover.

The IAG boss also said that he would try to revive the fortunes of Cork Airport if the proposed deal went through.

Unions have warned that up 1,200 jobs could be lost due to such a takeover as they pointed to the situation at Iberia when it merged into the IAG consortium.

TDs have also expressed doubts on how legally binding any guarantee on the Heathrow slots could be.