Business Irish

Monday 23 April 2018

IAG still after Aer Lingus 'if the terms make sense'

Willie Walsh
Willie Walsh
John Mulligan

John Mulligan

IAG boss Willie Walsh is prepared to ditch his €1.4bn bid to buy Aer Lingus even though he is still "very interested" in acquiring the airline.

But Mr Walsh said he would be ready to drop the offer if it no longer appeared to make sense and described it as not being a "must do deal".

And he stressed that IAG has not changed its stance on concessions it has already offered the Government.

"We will only do it on terms that are acceptable to us," he said. "We will have no hesitation about not proceeding if the terms are not acceptable."

It also emerged yesterday that Scandinavian airline SAS has sold another take-off and landing 'slot-pair' at Heathrow Airport, this time to Turkish Airlines for $22m (€20m).

The likely valuation of the 23 Heathrow slots controlled by Aer Lingus has been a contentious issue, especially among opponents to the airline's possible sale to IAG.

The slot-pair SAS has sold is for use in the afternoon and serves to underscore the wide variation in pricing for each individual slot. It's much less than the $60m (€54m) that SAS recently sold another Heathrow slot-pair for to an anonymous airline buyer.

Slot valuations given to the Irish Independent this week by a leading UK aviation expert suggest that the Aer Lingus Heathrow slots are probably worth somewhere between €400m and €500m.

Transport Minister Paschal Donohoe also said this week that a guarantee offered by IAG that it would use Aer Lingus slots at Heathrow to only serve Irish routes for at least five years after a takeover, isn't sufficient. Mr Walsh declined to say if IAG would be prepared to offer a 10-year guarantee on the use of those slots if it was in turn offered a 10-year deal on landing charges at Irish airports.

"I've been very clear in terms of what we are prepared to do and that remains our position," he told BBC radio yesterday as IAG released strong financial results for 2014.

"I'm not going to negotiate over the air with the Irish government or anybody else," said Mr Walsh.

"We've been very clear with the Irish government that we want to acquire Aer Lingus to grow the business," he added. "We see it as a growth opportunity. It's performing well today. We believe it can perform even better as part of IAG.

"We see opportunities to expand in a significant way the Aer Lingus business on the transatlantic, which would have great benefit for Aer Lingus, the employees, and the Irish government," he said.

"We believe this is a very, very strong story for everybody involved."

Mr Walsh will meet the airline's unions next Friday,

Irish Independent

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