BA rules out move for €100m Aer Lingus stake
WILLIE Walsh, the Irishman at the controls of British Airways, has ruled out a bid for the €390m-valued Aer Lingus — because of the massive pension deficit that exists at the Irish airline.
“I know a lot about pension deficits, there's one thing you don't want to do and that's go looking for one,” he said at the London Irish Business Society last week.
“It's not going to be easy for anybody to progress the sale of Aer Lingus, because people will want to see either that Aer Lingus has a responsibility [to fill the pension hole], or it doesn't,” said Mr Walsh, who was previously at the helm of the Irish airline. “The uncertainty is definitely going to discourage people from looking at Aer Lingus,” he added.
The Irish airline, headed by Christoph Mueller, is sitting on a pension fund deficit of close to €400m. Mr Walsh is chief executive of IAG — the parent company of the newly-merged British Airways and Iberia. IAG had been considered by many analysts as the most likely buyer of the Government’s 25 per cent stake in Aer Lingus because of its thirst for landing slots at Heathrow.
“There is nothing happening with any Aer Lingus sale at the moment and IAG has other things to focus on,” said sources at the airline. Mr Walsh’s comments would appear to throw the race to buy Aer Lingus wide open. Lufthansa, Air France KLM and private-equity players have been touted as potential bidders if the Government stake is put up for sale. However, last week the Department of Transport — headed by Leo Varadkar — indicated that it had not made a final decision on the sale of its stake in the airline.
Ryanair has announced that it is prepared to sell its blocking stake in the airline. The low-cost carrier also blasted Aer Lingus over plans to resolve the pension deficit and called for the payment of a special dividend for shareholders