Monday 23 April 2018

Aer Lingus: Willie Walsh offers sweeteners on Cork and Shannon airports

IAG chief executive rounds off his 24-hour charm blitz with ultimatum to Oireachtas transport committee

Willie Walsh, chief executive of IAG, leaves Leinster House after his meeting with the Oireachtas Committee on Transport. Photo: Frank McGrath
Willie Walsh, chief executive of IAG, leaves Leinster House after his meeting with the Oireachtas Committee on Transport. Photo: Frank McGrath
John Mulligan

John Mulligan

IAG boss Willie Walsh will offer specific concessions to Cork and Shannon airports in an effort to seal his planned €1.4bn takeover of Aer Lingus.

In 24-hour charm blitz, the aviation chief insisted that there was nothing to fear from an IAG takeover of Aer Lingus.

For over two hours yesterday afternoon, he answered questions about his plans from TDs and Senators at the Oireachtas Joint Committee on Transport.

Asked by the Irish Independent if he felt he'd been successful in persuading opponents to a deal that it would be in the best interest of Aer Lingus, Mr Walsh said: "We'll see."

"I enjoyed it," he said. "I got an opportunity to address most, if not all of their concerns and it was great to have that opportunity."

He added: "I think they've heard a lot more than they have heard previously and that can only go to making this a little bit easier.

"It was a very positive engagement. I thought it was a very good, proactive discussion today."

Read more: Willie or won't he coax our TDs to take a flier on IAG?

But he conceded that some jobs, in areas such as procurement and administration, would be lost in the short-term at Aer Lingus if it's bought, but that would be offset by IAG's plan to grow the Irish airline.

Mr Walsh tried to persuade TDs and Senators at the Oireachtas Joint Committee on Transport that an Aer Lingus takeover would be good for the airline and confirmed that fresh concessions were on the cards for Cork and Shannon. "That is something that I would be prepared to do," he said.

"To be honest, I see no reason why we wouldn't operate services from Shannon and from Cork to Heathrow," said Mr Walsh.

Later Clare Fine Gael Senator Tony Mulcahy said he would resign the party whip if the Government sells its shareholding in Aer Lingus to IAG.

IAG confirmed in a statement following Mr Walsh's appearance that extra concessions were being plotted for the two airports following the airline chief's meeting with Transport Minister Paschal Donohoe. IAG said the commitment would be for five years and would mean ensuring services from Cork and Shannon to Heathrow were maintained during that period.

Read more: Ryanair will appeal order to cut 29pc Aer Lingus stake

"They are sustainable routes," he said. The chief executive also said he wouldn't give assurances beyond five years.

On the jobs front, Mr Walsh couldn't give specific promises, but pointed out that each additional large long-haul aircraft it would add to the Aer Lingus fleet would result in about 100 new jobs. That could mean as many as 500 new jobs at Aer Lingus over the next five years.

He described as "utter nonsense" claims that up to 1,200 jobs could be lost at Aer Lingus if IAG buys it. Aer Lingus has about 3,600 full-time equivalent staff and is itself looking to cut those numbers through voluntary redundancies.

Read more: Q&A Please fasten your seatbelts - there's a fair chance of turbulence ahead

"I'm in the business of growth," he said. "With the growth in the Aer Lingus network comes the growth in jobs."

Despite his commitment, Impact, the trade union which represents a large number of the company's cabin crew, pilots and ground staff, said it still had job concerns.

"We said there would be job losses, due to duplication and he confirmed today that was the case," an Impact spokesperson said. "In the event where IAG takes over Aer Lingus, job losses at the airline are inevitable, and that remains the case."

Opportunity

Mr Walsh said the acquisition of Aer Lingus represents a significant opportunity for both IAG and the Irish airline.

He also made it clear that his proposal and the commitments offered were based on both the Government and Ryanair, which owns almost 30pc of Aer Lingus, agreeing to a sale.

"Our approach is subject to an irrevocable (undertaking) from the Irish Government and Ryanair to sell their shares. That is what we are seeking," said Mr Walsh.

"The commitments that we give are based on IAG acquiring ownership of Aer Lingus. We're not prepared to give those commitments in absence of that," he added.

The IAG chief said his first offer shouldn't be seen as an opening gambit. He said if he makes a second offer for something, it's often a lesser offer.

Irish Independent

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