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IAG plan a match made in heaven for O'Leary

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The terminal's eastern façade now stares down on the old arrival and departures building which is lying empty and idle. Ryanair's Michael O'Leary wanted to make it a hub for his budget carrier. But Cork Airport, or rather their Dublin Airport Authority (DAA) owners, chose to keep it moth-balled

The terminal's eastern façade now stares down on the old arrival and departures building which is lying empty and idle. Ryanair's Michael O'Leary wanted to make it a hub for his budget carrier. But Cork Airport, or rather their Dublin Airport Authority (DAA) owners, chose to keep it moth-balled

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Michael O'Leary, chief executive officer of Ryanair Holdings Plc, left, listens as Willie Walsh, chief executive officer of International Consolidated Airlines Group SA (IAG), speaks during a news conference in London, U.K., on Thursday, Nov. 17, 2011. Ryanair Holdings Plc, EasyJet Plc, Virgin Atlantic Airways Ltd. and British Airways-owner IAG called on the U.K. to scrap an aviation tax they say is hurting the economy to a degree that outweighs the revenue raised. Photographer: Chris Ratcliffe/Bloomberg

Michael O'Leary, chief executive officer of Ryanair Holdings Plc, left, listens as Willie Walsh, chief executive officer of International Consolidated Airlines Group SA (IAG), speaks during a news conference in London, U.K., on Thursday, Nov. 17, 2011. Ryanair Holdings Plc, EasyJet Plc, Virgin Atlantic Airways Ltd. and British Airways-owner IAG called on the U.K. to scrap an aviation tax they say is hurting the economy to a degree that outweighs the revenue raised. Photographer: Chris Ratcliffe/Bloomberg

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The terminal's eastern façade now stares down on the old arrival and departures building which is lying empty and idle. Ryanair's Michael O'Leary wanted to make it a hub for his budget carrier. But Cork Airport, or rather their Dublin Airport Authority (DAA) owners, chose to keep it moth-balled

IAG boss Willie Walsh and Ryanair’s Michael O’Leary aren’t exactly pals, but they do have one thing in common – pragmatism.

They know when a deal makes commercial sense that differences can be put aside for the common good. And they have form.

In 2012, when Ryanair last hatched a takeover attempt for Aer Lingus, it cooked up a deal with IAG and Flybe that would see chunks of Aer Lingus’ business hived off to those two airline groups. That was proposed in an effort to appease competition czars. Nevertheless, the takeover attempt was blocked.

Ryanair’s Kenny Jacobs shed a lot of light yesterday on why the airline doesn’t have an issue with IAG buying Aer Lingus, and indeed how such a move could benefit Ryanair’s business out of Ireland. IAG is understood to be primarily focused on using Aer Lingus to grow transatlantic business out of Dublin. It would avail of US immigration and customs pre-clearance in the capital to lure travellers from regional UK cities, and even price-sensitive ones from London. They could land in Dublin and travel on to the US as domestic passengers, easing their passage on arrival in America.

Aer Lingus Regional already feeds US-bound transfer traffic via Dublin from the UK, but it’s thought that IAG thinks there’s potential to do much more.

With IAG focused on expanding Aer Lingus’ operations westwards, and without doubt shying away from a battle with Ryanair on short-haul flights to Europe, that leaves the door open for Ryanair to seize an opportunity to grow its traffic out of Ireland.

Mr Jacobs said Aer Lingus “will need a partner” for the future, and it seems IAG is  the kind of partner Ryanair hopes Aer Lingus gets.

Ryanair has aggressive plans to expand its corporate traveller business. Mr Jacobs said that Ryanair now has about 50pc of the business between Dublin and Brussels Zaventem – a route that had been the sole preserve of Aer Lingus – having launched the service in the autumn. Ryanair would also consider flying out of Heathrow if IAG was forced to offload slots.

Irish Independent