Business Irish

Monday 20 November 2017

Aer Lingus sale: IAG's Willie Walsh gives Heathrow slot guarantees to Government

John Mulligan

John Mulligan

IAG boss Willie Walsh has pledged to retain critical takeoff and landing slots controlled by Aer Lingus at Heathrow Airport and offer legally-binding agreements to the government in its efforts to buy the airline.

The British Airways owner is attempting to take over Aer Lingus with a €1.4bn bid for the company but the Government is concerned about connectivity and the future of the Heathrow slots.

In a document just submitted to a review group established by the Department of Transport, Mr Walsh said that it believes its proposal “would secure and strengthen Aer Lingus' long term future and brand as a member of a successful and profitable European airline group, offering significant benefits to both Aer Lingus and its customers”.

“We are committed to maintaining and strengthening Aer Lingus,” said Mr Walsh.

“We want to develop air services that ensure Ireland’s connectivity is enhanced.  In seeking the support of the Irish Government, we propose to offer it legally binding commitments that go well beyond the protections currently available to it.

"These commitments would give the Irish Government an important role that they do not have today in securing the future of Aer Lingus.”

Read more: Aer Lingus sale: 'Concerns about Heathrow slots are hysterical nonsense' - Ryanair's Michael O'Leary

IAG said it will ensure the 23 slots controlled by Aer Lingus at Heathrow would be used only for Irish routes for the next five years.

It has also promised to keep the Aer Lingus brand, as well as the airline’s headquarters.

IAG has proposed commitments to ensure:

·Aer Lingus’ 23 slot pairs at London Heathrow (“Heathrow Slots”), cannot be sold, including to other IAG airlines;

· Aer Lingus’ name, head office location or place of incorporation in the Republic of Ireland, cannot be changed.

·In addition, IAG is prepared to offer a further commitment to operate the slots on Irish routes for five years. This is protection that the Government does not have today.

Transport Minister Pascal Donohoe said: 'I note the statement from IAG this afternoon and will examine the details very carefully'

Earlier, the minister refused to go as far as Taoiseach Enda Kenny by demanding ‘lifetime’ guarantees on the future of Aer Lingus if the company is sold to IAG.

Mr Donohoe was speaking at Donegal airport in Carrickfinn after taking the inaugural Aer Lingus Regional flight from the capital this afternoon.

The flight is operated by Stobart airlines and has been given a Government grant to service the route between the Donegal gaeltacht and Dublin.

Asked if the Taoiseach had effectively closed to door on the sale of Aer Lingus with his demands for ‘permanent’ guarantees on routes, Mr Donohoe insisted: “I’m not going to pre-judge what may happen in relation to a formal proposal which we have to further understand.

“I expect to see further contact between my own department and IAG this week so we can further understand the nature of the proposal.”

The Minister went on: “Alongside that, the Government has been very clear from the very start of this process that we will evaluate this in terms of more than just the price of a share.

“What is vital to our economy is access and connectivity and ensuring that this is maintained and grown in the future. This is vital for how we evaluate any proposal.”

Junior Gaeltacht Minister and Donegal TD Joe McHugh preferred to dwell on the new link which is grant-aided as a Public Service Obligation (PSO) route.

“Having Are Lingus Regional flying to Donegal twice every day from Dublin will help bring more and more tourists to the North West and straight to the Wild Atlantic Way,” he said.

“It also secures 25 jobs here at the airport and will help grow our tourism industry still further.

“It is also vital for links between here and Dublin for local businesses.”

Paul Diver, owner of the Sandhouse Hotel in Rossnowlagh, was among a number of hoteliers at the launch.

“We’re just 35 minutes from Dublin and the link with Are Lingus and its ability to deliver passengers to west Donegal from anywhere in the world is a massive step forward,” he said.

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