Saturday 16 December 2017

IAG makes seven-year pledge on Aer Lingus' Heathrow slots

Aer Lingus and British Airways plans on the Heathrow tarmac
Aer Lingus and British Airways plans on the Heathrow tarmac
John Mulligan

John Mulligan

IAG is understood to have told the Government that it will use prized Aer Lingus slots at Heathrow to serve only routes to Ireland for at least seven years if it succeeds in buying the Irish airline.

It's been previously speculated that IAG was formulating a seven-year guarantee in an effort to get the Government on board regarding the planned €1.36bn takeover.

IAG had previously offered a five-year pledge on the future use of Heathrow slots, but Transport Minister Paschal Donohoe had insisted that was insufficient.

The Government pushed for a 10-year guarantee, but IAG chief executive Willie Walsh had indicated that such a long guarantee on slot use would be commercially unviable.

The Government controls 25.1pc of Aer Lingus and has spent the past few months assessing the possible takeover deal. News agency Bloomberg yesterday said that a seven-year guarantee is now definitely on the table, with the Department of Transport insisting that no deal with IAG on a takeover has yet been agreed.

The Irish Independent understands that the proposed Aer Lingus takeover is not on the agenda for next Tuesday's Cabinet meeting.

It is possible that a report prepared by a steering group for the Government could be discussed by Cabinet the following week.

However, trade unions still have to be brought on board and have insisted they need to be consulted before the Cabinet makes any decision. They have not yet had any recent talks with the Government or the steering group on the proposed takeover.

It's taking so long for the Government to make a decision because the steering group has been liaising with EU officials to ensure any proposed deals with Government won't fall foul of competition tsars. IAG also wants Ryanair to agree to sell its near 30pc stake in Aer Lingus before making any formal offer to buy the Irish carrier.

Irish Independent

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