Aer Lingus sale: 'IAG willing to ditch bid if no longer makes sense' - Willie Walsh
IAG boss Willie Walsh is prepared to ditch his €1.4bn effort to buy Aer Lingus if it no longer makes sense, but insisted this morning that he remains “very interested” in acquiring the Irish airline.
He was commenting as IAG reported strong financial results for 2014.
The airline group, which owns British Airways, as well as Spanish carriers Iberia and Vueling, beat profit forecasts for last year and said it expects to make more money this year than previously anticipated. Iberia also started making money again after a string of losses. It posted a €50m operating profit.
IAG’s pre-exceptional operating profit rose 80.5pc to €1.39bn, while revenue climbed 8pc to €20.1bn.
“We remain very interested in acquiring Aer Lingus,” said Mr. Walsh. However, he added that IAG would be “comfortable” ditching a deal if it no longer seemed to make sense.
He declined to say if IAG is willing to offer more concessions to the Government and other stakeholders in its bid to buy Aer Lingus.
Willie Walsh has pledged to create 635 net new jobs at Aer Lingus by 2020 and also to launch new routes to North America from Dublin. He said IAG would also bring an extra 2.5 million passengers to Ireland by 2020.
The Government, which controls 25.1pc of Aer Lingus, wants more information about the level of job creation, potential job losses, and also an extended commitment on the use of Heathrow slots to service routes to Ireland.
IAG has offered a five-year guarantee that it will use Aer Lingus slots at Heathrow to service only Irish routes. The Government said that’s not good enough.
Mr Walsh and Aer Lingus chief executive Stephen Kavanagh is due to meet Aer Lingus unions next Friday. Union representatives are expecting more detail on IAG’s plans for the Irish airline if it succeeds in buying it.
IAG expects to make an operating profit of €2.2bn this year – more than the €1.8bn it had previously anticipated it would generate.
Company chief financial officer Enrique Dupuy told investors this morning that Iberia has been performing well as it emerges from a major restructuring exercise. He pointed out that the carrier will be expanding as productivity increases, costs drop and it becomes competitive again on major routes.