Thursday 22 February 2018

Multinationals voice fears over Aer Lingus sale

Sale of airline slots would impact hugely on FDI

An Aer Lingus plane taxis before take off at Dublin airport. Reuters
An Aer Lingus plane taxis before take off at Dublin airport. Reuters

Sarah McCabe, Nick Webb and Paul O'Donoghue

The world's biggest multinationals are concerned about what the sale of Aer Lingus will mean for their businesses and future foreign investment into Ireland.

Pfizer, Bristol Myers Squibb, Icon, Element Six, Intercom, Telecity and others have all voiced concerns about the impact on their businesses if Aer Lingus loses its valuable Heathrow slots and transatlantic routes as part of a proposed takeover bid by IAG.

There is speculation that IAG will use the 23 Aer Lingus Heathrow slots for non-Irish routes if its €1.36bn bid is successful, and could close some of the airline's less profitable transatlantic routes.

Pharmaceutical companies that import and export heavily are very vulnerable to changes in air connectivity, said John Nason, vice president for external manufacturing at Bristol Meyers Squibb.

"We produce around 50pc of Ireland's total exports and we import heavily too. Ten of the industry's top 12 pharma products are supplied out of Ireland. We want to see growth in connectivity, not restriction. Air travel is a critical infrastructure for us. Anything that could impact this will not be viewed lightly" Mr Nason said.

"The other important thing is the impact this could have on future potential foreign direct investment. These people want to be able to get to Ireland on a direct flight at regular hours, and not have to fly via Paris or whatever. I think connectivity is certainly on the table for discussion for companies considering setting up here."

"As an island, Ireland's accessibility is vital to our attractiveness as an inward investment destination" said Maurice Mortell, country manager at Telecity Group.

"Heathrow services over 40pc of all business travellers in the UK and is a major stopover for international connecting flights. It is absolutely critical that senior executives in multinationals can travel here with ease. For data centre businesses like TelecityGroup, the San Francisco to Dublin route is key and a portion of these flights are connected via Heathrow, so it's imperative that we maintain these slots."

"We connect to the US quite a bit and Dublin and Shannon to New York flights are very important to us" said Pfizer country head Paul Duffy.

Transport Minister Paschal Donohue has pledged that the government will take connectivity to Heathrow and transatlantic services into account when weighing up the sale of Aer Lingus.

But Ryanair boss Michael O'Leary has rubbished this.

"At the end of the day the only decision the Irish Government can make is do you want to accept this price for your shares in Aer Lingus or not," he told the Sunday Independent.

"The idea that somehow the national interest will be preserved in some other way is bogus. All this nonsense about getting assurances... you can't get assurances" he said.

Sunday Indo Business

Promoted Links

Business Newsletter

Read the leading stories from the world of Business.

Promoted Links

Also in Business