Thursday 19 October 2017

Aer Lingus sale: Coalition to meet bidder IAG for first time

Willie Walsh of IAG
Willie Walsh of IAG
John Mulligan

John Mulligan

GOVERNMENT advisers will meet representatives from IAG this afternoon in what will be the first formal engagement between the two sides in the €1.4bn battle for Aer Lingus.

The meeting comes as business groups remain fractured in their views on a possible sale of the airline.

Business group Ibec told the Oireachtas Joint Committee on Transport that it broadly supported IAG's proposed takeover of Aer Lingus, but the Irish Hotels Federation (IHF) said it had "serious concerns" about a deal. It's still not clear whether IAG chief executive Willie Walsh will attend today's meeting - which is likely to be in Government Buildings.

IAG executives are in Dublin as they continue their trawl through Aer Lingus accounts and operational details. That due diligence phase started in earnest this week and is likely to last about three weeks.

The Government's Review Group is likely to have a number of detailed technical questions for IAG after the British Airways owner pledged a number of assurances on Monday.

IAG has promised that it would give the Government a veto over the sale of any Aer Lingus slots in Heathrow and will also use those slots to service Irish routes for at least five years after a takeover.

Ibec said that subject to "appropriate safeguards", a takeover of Aer Lingus by IAG "could well represent a positive economic opportunity for Ireland as a whole".

The IDA sounded a cautionary note, stressing the importance of regional and broader air connections for attracting foreign direct investment.

The IDA's head of international financial services, Kieran Donoghue, said: "The largest segment of our business is made up of US companies locating activities in Europe, Middle East, Africa or international markets.

"In a company site selection process, the ability to fly in executives from key cities in the US, convenient to their HQ location, directly to Ireland, is an important consideration."

Mr Donoghue added that Ireland "needs competition between carriers" but added that the IDA can't assess a proposed sale of Aer Lingus without knowing future development plans.

Enterprise Ireland's head of investment services, Niall O'Donnellan, said it believes Irish companies need good access to international locations.

Critical

"For us, the critical issue is direct access to key markets," he said. "There is deep importance in access, not just from Dublin, but from Cork and Shannon."

Tim Fenn, the chief executive of the Irish Hotels Federation, said he has "serious concerns" about the proposed sale.

"We believe the potential sale would have enormous implications for the tourism industry.

"The IHF has serious concerns about the sale of Aer Lingus and the prospect of its Heathrow slots being reallocated down the line."

Meanwhile, the British Irish Chamber of Commerce said it would welcome a sale of Aer Lingus to IAG. "Enhanced focus on Ireland from a strong international carrier like IAG could assist new route development efforts from Irish airports," it said.

And Northern Ireland First Minister Peter Robinson and deputy Martin McGuinness insisted Belfast to Heathrow slots are essential for the region's economic development.

Irish Independent

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