Business Irish

Monday 20 November 2017

Aer Lingus better off being owned by Ryanair, says Willie Walsh

IAG chief queries motives of rival Etihad

Willie Walsh, the chief executive of International Airlines Group
Willie Walsh, the chief executive of International Airlines Group
John Mulligan

John Mulligan

Aer Lingus would be better off being owned by Ryanair than Abu Dhabi-based carrier Etihad, according to Willie Walsh, the chief executive of International Airlines Group (IAG).

Mr Walsh has questioned the motives of Etihad's interest in Aer Lingus. The Gulf carrier owns just under 3pc of the Irish airline and its chief executive, James Hogan, has said he'd be interested in increasing that.

"If somebody thought Etihad is a better shareholder than Ryanair, I'd love for them to explain why and how that would be the case," Mr Walsh told the Irish Independent.

"I see it as quite the opposite. Ryanair wants Ireland and, whatever you say about Michael O'Leary, he's proud to be an Irishman, lives here and has created one of the most valuable airlines in the world.How is that less attractive to Ireland than Abu Dhabi?"

Mr Walsh said he didn't believe Aer Lingus would ever be approached by potential buyers while the Government and Ryanair remained shareholders.

Mr Walsh, whose IAG owns British Airways and Spain's Iberia, has previously indicated that he is not interested in acquiring Aer Lingus, in which the State owns a 25.1pc stake.

His comments come as Britain's Competition Commission prepares this week to release further details of its preliminary finding that Ryanair exerts "material influence" over Aer Lingus through its near 30pc shareholding in its smaller rival.

STAKE

In a final determination due in July, the watchdog is almost certain to instruct Ryanair to substantially reduce its Aer Lingus stake – a move that Ryanair said it intended to appeal.

Mr O'Leary slammed the watchdog's preliminary finding yesterday.

"Aer Lingus affects the lives of no British consumers," he said in an interview with a British newspaper. "I doubt if even 1pc of the UK population has ever flown on, or will ever fly on, Aer Lingus."

Under existing European rules, companies from outside the trading bloc can't currently acquire more than 49pc of a European airline. "He (James Hogan) can never own Aer Lingus, so therefore if he has a stake in it he will always be competing with it, exactly the same as Ryanair," said Mr Walsh.

Etihad – founded 10 years ago – also owns a 29pc stake in Air Berlin, 10pc of Virgin Australia, 24pc of India's Jet Airways and 40pc of Air Seychelles.

"His job is to develop Abu Dhabi and Etihad (which is owned by the Abu Dhabi emirate)," added Mr Walsh. "What he has done with the investments he has made is to use those airlines to flow traffic over Abu Dhabi. What James would want is to take traffic over Ireland to Abu Dhabi. I don't think that's necessarily aligned with what Ireland would want to do."

Both Etihad and its larger Dubai-based rival Emirates have developed successful routes from Dublin to the United Arab Emirates, with the bulk of passengers from Ireland flying on to destinations in Asia and Australia.

Irish Independent

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