BA's Walsh rules out Aer Lingus move over pension black hole
Published 17/09/2011 | 05:00
The Government's attempts to sell its Aer Lingus stake have been dealt a severe blow with British Airways chief executive Willie Walsh saying his carrier is not interested as he is worried about the airline's pension black hole.
Contrary to some suggestions, BA is not interested in acquiring the stake, with Air France/KLM and Lufthansa also unlikely to make a purchase, at least while Ryanair remains on the share register.
"It's got a lot of challenges; it's not helped by the fact that the Irish economy is in a weak position,'' said Mr Walsh.
"With Ryanair on 30pc and the Government on 25pc, nobody in their right mind would look to invest in Aer Lingus -- that would require both the Irish Government and Ryanair to decide to sell,'' said Mr Walsh.
"I am very clear from my understanding of the rules that Aer Lingus has no responsibility for funding that deficit. I'm equally conscious that there are different legal opinions expressed and that Aer Lingus said there may be uncertainty about that.
"I know a lot about pension deficits -- there's one thing you don't want to do and that's go looking for one,'' Mr Walsh said this week in London.
The Irishman said the scale of the deficit was likely to put off many buyers, even though the airline isn't legally obliged to fill the black hole which comes to €400m. Instead Mr Walsh is pursuing BMI, the UK carrier, and Portugal's TAP.
Speaking at the London Irish Business Society on Thursday, Mr Walsh said he was convinced Aer Lingus was ready for sale.
While it has €358m in net cash and is not legally responsible for the deficit, Mr Walsh said the problem was likely to deter buyers.
Meanwhile, Ryanair is campaigning to encourage other Aer Lingus shareholders to join it in putting pressure on the airline over its pension scheme.
Yesterday Ryanair invited other "concerned" Aer Lingus shareholders to "make their opinion known" on the continuing uncertainty over its defined contribution pension scheme.
Ryanair has accused its competitor of mishandling the pension issue.
It wants to stop making payments to the scheme without shareholder approval.