Business Irish

Friday 27 April 2018

Virgin warns IAG could have monopoly on flights

Aer Lingus
Aer Lingus
Virgin Atlantic
Virgin Atlantic boss Richard Branson
IAG chief executive Willie Walsh. Photo: Steve Humphreys
Colm Kelpie

Colm Kelpie

An agreement allowing Aer Lingus passengers to connect on to long-haul Virgin Atlantic routes could disappear if an IAG bid is sealed, Virgin has warned.

Virgin Atlantic, the carrier founded by Richard Branson, has intervened in the row over whether the Government should offload its 25pc stake, insisting that Irish consumers will lose out if the sale proceeds without adequate assurances.

A senior representative of the carrier also admitted to TDs and senators that Virgin's business could be dented by a deal. And it signalled it would have no interest on introducing any routes from Ireland if Aer Lingus was sold to IAG.

Joe Thompson, Virgin Atlantic's director of network and alliances, told the Oireachtas Transport committee yesterday that Aer Lingus was Virgin's top route feed partner in terms of connections per day.

He said 100,000 Aer Lingus passengers travel on Virgin long haul routes per year, and claimed that choice will be at risk under an IAG deal.

"IAG will have a monopoly on the flights between Ireland and the UK that enable the vast majority of these connections," Mr Thompson said. "It will be able to withdraw from these interline agreements with airlines that provide competition for connecting passengers."

IAG is bidding for Aer Lingus, which has been valued at €1.4bn, but has yet to win over the Government, as the State holds a 25.1pc stake, and trade unions, which have accused IAG of giving vague assurances.

Mr Thompson also questioned what legal guarantees had been sought from IAG in terms of the frequency of flights between the UK and Ireland on both Aer Lingus and British Airways, and what guarantees have been sought that IAG will not downgrade the size of the aircraft operating on these routes if a deal was to go ahead.

"IAG has made some public offers of commitments on Aer Lingus frequencies, but importantly it's made no promises about BA services, leaving it free to reduce BA frequencies after the transaction," Mr Thompson said. "Any commitment should be extended to cover British Airways as well as Aer Lingus, so the current level of frequencies is maintained."

He also called for assurances that IAG, if it is successful in its bid, will continue to work with Aer Lingus's current partner airlines.

Mr Thompson accepted that an Aer Lingus sale to IAG would have a "commercial impact" on Virgin, but he said Virgin welcomed competition.

And he said the prospect of Virgin operating services out of Ireland wasn't attractive if IAG's bid succeeds as IAG would have a monopoly. Virgin, he said, wasn't opposed to a deal, but believed assurances should be sought. He said the airline was "agnostic" on a potential deal.

Irish Independent

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