Sunday 18 March 2018

Fresh IAG pledges fail to sway Government on Aer Lingus sale

Paschal Donohoe. Photo: Frank McGrath
Paschal Donohoe. Photo: Frank McGrath
Niall O'Connor

Niall O'Connor

Airline giant IAG offered a range of sweeteners to the Government last Friday surrounding the areas of jobs, passengers and connectivity - but this did not go far enough.

The Irish Independent can reveal that IAG boss Willie Walsh pledged to create 635 net jobs by 2020, bring in an additional 2.5 million passengers to Ireland and serve five new North American destinations.

But despite the significant new set of sweeteners, Transport Minister Paschal Donohoe has recommended that the offer be rejected pending more detail and assurances being given by Mr Walsh.

Government sources last night said Mr Donohoe is playing "hardball" in a bid to ensure that the State gets the best possible deal from the sale of its 25.1pc Aer Lingus stake.

Nonetheless, the pledges in the areas of jobs, new routes and passenger numbers indicate the level of strength of Mr Walsh's bid.

On employment, he told Mr Donohoe in correspondence with his office that 635 net jobs would be created by 2020.

These would be in areas such as pilots, cabin crew, engineers and ground staff and represent a major boost to the north Dublin area.

In terms of passenger numbers, the revised offered tabled by IAG promises to bring in an additional 2.5 million passengers, of which one million would be long haul, by 2020.Such figures, if they materialised, would provide a major boost to the country's tourism sector.

The revised offer by Mr Walsh also contained a section on new destinations.

IAG pledged to create five additional destinations between Ireland and North America by 2020 but did not give specific locations.

This element of the offer went some way to alleviate concerns about Ireland's connectivity. Mr Donohoe has sought further specific details from Mr Walsh in these and other areas of his offer.

He has sought the names of the five locations that Mr Walsh aims to select as new North American destinations as well as a timeframe for the creation of the additional jobs.

Mr Donohoe's decision yesterday to recommend that the Cabinet reject the offer is being viewed as a gamble within political circles. But he is understood to be open to the idea of a sale if Mr Walsh can come back with an improved offer.

"The ball is back in Willie Walsh's court," said a Government source.

A spokesperson for Labour Party leader Joan Burton said the party supports Mr Donohoe's stance that there are still concerns outstanding, including the five-year term governing routes.

Labour's so-called 'Aer Lingus seven' - which has mounted major opposition to the sale of the stake - is scheduled to meet to discuss the development today.

The group is due to submit an emergency motion ahead of the party's national conference in Killarney this weekend, which is aimed at rubber-stamping Labour's opposition to a sale prior to the general election.

One of the group's members, Dublin Central TD Joe Costello, said the motion is likely to "go further" than the Minister's statement.

"This is an unacceptable bid, it's a case of selling what we have left of the family sliver for a below par bid," he said.

Mr Donohoe said the guarantee from IAG that it would continue to use Aer Lingus slots at Heathrow only to serve routes to Ireland for at least five years needs to be longer. He also wants firm commitments as to how IAG would grow services at Cork, Shannon and Knock.

New Aer Lingus chief executive Stephen Kavanagh said: "We have a job to convince others. But I do believe that others need to also reflect and consider the facts of the proposition: don't just listen to us, but actually analyse what's been said by IAG, by Aer Lingus, by all informed analysis."

IAG said it will consider Mr Donohoe's statement "in due course".

Irish Independent

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