Saturday 1 October 2016

Coalition will approve sale of Aer Lingus to IAG today

Published 26/05/2015 | 02:30

The Coalition is expected to approve the sale of the State's 25pc stake in Aer Lingus to British Airways owners, IAG
The Coalition is expected to approve the sale of the State's 25pc stake in Aer Lingus to British Airways owners, IAG

The Coalition is expected to approve the sale of the State's 25pc stake in Aer Lingus to British Airways owners, IAG.

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Taoiseach Enda Kenny confirmed this morning the Cabinet will be discussing the matter.

Speaking ahead of a meeting with UN Chief Ban Ki-Moon, Mr Kenny said Transport Minister had assessed the report from an expert group which said IAG had offered a fair price for Aer Lingus. This report will be presented at cabinet this morning.

Transport Minister Paschal Donohoe will bring a proposal to Cabinet this morning on foot of an expert group.

The decision follows assurances provided by IAG on top of the €1.4bn bid guaranteeing to maintain routes between Ireland and London for seven years as a condition of sale.

It is understood that any agreement will be conditional on a veto over any sale of the Aer Lingus slots at Heathrow.

Up to yesterday evening, a Government decision had been ruled out for this week.

But last night one political source suggested this could change and a decision might in fact be taken later today.

Mr Donohoe has already contacted the European Commission to ensure any sale does not contravene Brussels rules.

It is understood the commission has not raised any initial objections to pledges made by the purchasers, IAG, as part of its takeover bid for Aer Lingus.

The Government had sought a general indication from the EU that this would not raise concerns under competition law. The Coalition has received a report by an expert group advising on the possible sale that was commissioned after the Government rejected IAG's terms in February.

It is hoped that enhanced terms could win over opposition from the Labour Party and the trade unions.

A spokeswoman for Mr Donohoe said the minister now had the expert report. "The item is not on the Cabinet agenda and I'm not making any further comment," the spokeswoman said.

A key issue in the saga will be the stance of Ryanair, which owns a near 30pc stake in Aer Lingus.

Ryanair boss Michael O'Leary remained tight-lipped on the deal this morning as the Dublin-based airline reported record profits.

"The board of Ryanair will consider any offer from IAG on its merits, if or when it is received," Mr O'Leary said.

Speaking on RTE's Morning Ireland earlier today Ryanair's Chief Operating Officer David O'Brien added that the firm has not yet received an offer from IAG, and said that Ryanair is currently "focused on growing its business".

The company is currently attempting to reverse a decision by the UK's Competition and Markets Authority to make Ryanair cut its holding in Aer Lingus to no more than 5pc.

IAG's proposed €1.36bn bid was recommended by the Aer Lingus board in January. But the group said it would proceed with a full bid only with the agreement of the Government and Ryanair.

IAG boss Willie Walsh has pledged to offer legally-binding agreements to the Government in its efforts to buy the airline.

In a submission to the review group, Mr Walsh said IAG felt its proposal "would secure and strengthen Aer Lingus's long-term future and brand as a member of a successful and profitable European airline group, offering significant benefits to both Aer Lingus and its customers".

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Irish Independent

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