Sunday 24 September 2017

Aer Lingus sale: Concessions on jobs, passenger numbers and destinations all put on table by IAG

Paschal Donohoe wants IAG to give further assurances on its plans for Aer Lingus
Paschal Donohoe wants IAG to give further assurances on its plans for Aer Lingus

Niall O'Connor and John Mulligan

Transport Minister Paschal Donohoe has made a major multi million euro gamble after he resisted the takeover bid from IAG despite a series of sweeteners being put on the table.

The Airline giant has offered several concessions surrounding the areas of jobs, passengers and connectivity.

Independent.ie has learned that company boss Willie Walsh pledged to create 635 net jobs by 2020, bring in an additional 2.5m passengers to Ireland and create five new North American destinations.

But despite the significant new set of sweeteners, Transport Minister Paschal Donohoe has recommended that the offer be rejected pending more detail and assurances being given by Mr Walsh.

Government sources tonight said Mr Donohoe is playing "hardball" in a bid to ensure that the State gets the best possible deal from the sale of the Aer Lingus stake.

Read more: Aer Lingus sale: 'IAG hasn't offered enough assurances to convince Government'

Nonetheless, the pledges in the areas of jobs, new routes and passenger numbers indicate the level of strength of Mr Walsh's bid.

On employment, he told Mr Donohoe in correspondence with his office that 635 net jobs would be created by 2020. These would be in areas such as pilots, cabin crew, engineers and ground staff and represent a major boost to the north Dublin area.

In terms of passenger numbers, the revised offer tabled by IAG promises to bring in an additional 2.5m passengers, of which one million would be long haul, by 2020.

Such figures, if materialised, would provide a major boost to the country's tourism sector.

The revised offer by Mr Walsh also contained a section on new destinations. IAG pledged to create five additional destinations between Ireland and North America by 2020 but did not give specific locations.

Read more: 'Aer Lingus Heathrow slots worth less than €500m' - incoming boss Kavanagh

This element of the offer went some way to alleviate concerns about Ireland's connectivity.

Mr Donohoe has sought further specific details from Mr Walsh in these and other areas of his offer.

He has sought the names of the five locations that Mr Walsh aims to select as new North American destinations as well as a timeframe for the creation of the additional jobs.

Mr Donohoe's decision yesterday to recommend that the Cabinet reject the offer is being viewed as a gamble within political circles. But he is understood to be open to the idea of a sale if Mr Walsh can come back with an improved offer.

"The ball is back in Willie Walsh's court," said a government source.

A spokesperson for Labour Party leader Joan Burton said the party supports Mr Donohoe's stance that there are still concerns outstanding, including the five year term governing routes.

Online Editors

Editor's Choice

Also in Irish News