Thursday 14 December 2017

CityJet executive: Ireland would be 'nuts' not to accept IAG offer for Aer Lingus

Pat Byrne accuses Government of 'protestionism' and 'island mentality'

Pat Byrne, non executive CEO of Cityjet, and CEO of Rainmaker Business Technologies Ltd.
Pat Byrne, non executive CEO of Cityjet, and CEO of Rainmaker Business Technologies Ltd.
Geraldine Gittens

Geraldine Gittens

A senior executive at CitiJet has said Ireland “would be nuts” not to accept the IAG offer for Aer Lingus – and he accused Taoiseach Enda Kenny of “protectionism” and “an island mentality” in negotiations.

Pat Byrne, non executive chairman of Cityjet, said if the government accepted IAG’s €1.4bn deal for Aer Lingus, it would lead to job expansion.

However, he said Enda Kenny is currently engaged in a strategy of “protectionism” which is harming Ireland’s business reputation.

The Government currently controls 25.1pc of Aer Lingus and holds the key to the €1.4bn deal.

Mr Byrne told Newstalk’s Breakfast today: “Enda goes around the world saying we’re the best little country to do business in and yet what he’s now talking about is the politics of protectionism, and protectionism never, ever succeeds. It always fails, we’ve a long history of that.”

“They’re going on about trying to protect our rights as an island nation. In fact what they’re doing is telling the world that we actually have an island mentality.”

 “You can’t lock jobs in by protectionism and negative movement and I think that’s what they’re trying to do. I think they’re failing to grasp the big picture of the expansionist opportunities that are here for Ireland.”

Mr Byrne said Dublin Airport could become a major European hub for immigration services, and a major competitor of hubs in the Middle East.

While a lack of guarantees on jobs at Aer Lingus is seen as a major stumbling block in negotiations, Mr Byrne said the deal would lead to job expansion.

“IAG are not sitting idly by and watching their lunch being stolen by the Middle East operators, Etihand, Emirates, who are sucking all of the long-haul traffic out of Europe and using their hubs in the Middle East, Abu Dhabi and Dubai.”

“They’re fighting back. I think there’s an opportunity here for Heathrow and Dublin to become a major hub, not just westwards but also east and south as well.

“We’d be absolutely nuts to pass off this opportunity from an Irish perspective, to get on the train, to get on the IAG train. I think we’d see expansion of jobs, not contraction of jobs.”

“Overall in the bigger picture, my read of it is that IAG certainly want to expand. They are contracted at Heathrow, I think that they want to use Dublin and build on the immigration services to the US. So I actually think that it’s a really, really good thing,” he told Newstalk’s Ivan Yates.

Mr Byrne cautioned that the Government must apply business logic to its decision on the IAG bid, and not be seen as a “pretty poor shareholder” in the negotiations.

“When we’re looking for money for Aer Lingus in the future, state aid will not be allowed and when they’re looking for new investment, other private investors out there are going to take a look at this and say ‘hang on a second’, we’re not going to be held to ransom by the 25pc shareholder who will satisfy local political needs and listen to local political noise and will not necessarily be applying business logic to its decisions.”

“I think it shows that the state can show up as a pretty poor shareholder in an operation like this.”

“Also Aer Lingus has to pay attention to where it is – it’s making a modest level of profit but it will have re-fleeting requirements in the future. It has some cash in the balance sheet but if this opportunity is passed up for political reasons it sends out a terrible message. ”

He added: “Overall it’s going to go through –  because I think this is too good a deal not to go through, it’s too good a deal  Ireland, I actually think it will go through in the end.”

“I think it’s all or nothing. I can’t see AIG wanting to have a minority shareholder. That’s not the way they operate. It’s all or nothing.”

A Dail Transport Committee hearing is discussing the impact of a takeover by IAG today.

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