Tuesday 23 January 2018

Aer Lingus top brass will push for takeover by IAG

Stephen Kavanagh (right)
Stephen Kavanagh (right)
Aer Lingus
John Mulligan

John Mulligan

Aer Lingus executives will try to persuade politicians this afternoon that a €1.4bn takeover of the company by IAG will result in huge growth at the airline.

Stephen Kavanagh, an Aer Lingus insider whom the airline named only yesterday as its new chief executive, will face members of the Oireachtas Joint Committee on Transport to explain why the deal makes sense.

Aer Lingus chairman Colm Barrington is also due to attend the meeting at 5pm.

Mr Kavanagh, who has been with the airline since 1988 and is its chief strategy and planning officer, will take up the chief executive post on March 1 when current boss Christoph Mueller leaves the company.

The Aer Lingus board has already lent its strong support to the IAG takeover approach.

The transport committee will also meet executives from UK firm Stobart Air, the company that operates the Aer Lingus Regional service under a franchise agreement.

Stobart Air's chairman Sean Brogan will represent the company at the meeting.

Committee chairman John O'Mahony said he was looking forward to "another robust discussion", following the appearance of IAG chief executive Willie Walsh last week.

Mr Kavanagh worked with Willie Walsh at Aer Lingus when Mr Walsh was the head of the Irish airline between 2001 and 2004.

Mr Barrington said he was "particularly pleased" that it had been possible for the airline to make an internal appointment to the top post. "Stephen has been a key member of the executive team that, over the last five years, has transformed Aer Lingus into a strong, profitable airline with a resilient business model and an improved cost base," he said.

Well regarded within the airline industry, Mr Kavanagh was always a lead contender for the chief executive role.

The Irish Independent reported last month that the race to fill the position had been reduced to Mr Kavanagh and the chief operations officer of EasyJet, Warwick Brady.

Financial analysts welcomed the appointment.

Stephen Furlong of Davy Stockbrokers said it was a positive move.

"I think he would have got the job anyway even without an IAG approach having been made, but he would also be a good fit with IAG if it succeeds in buying Aer Lingus."

IAG has separate chief executives for the airlines it owns, including British Airways.

Mr Kavanagh has been responsible for the recent growth in transatlantic services at Aer Lingus. Growing transatlantic passenger traffic out of Dublin is a key aim for IAG if it buys Aer Lingus.

Current Aer Lingus chief executive Christoph Mueller is leaving to become chief executive of Malaysia Airlines.

New boss steps into limelight

Stephen Kavanagh (47) won't be known to most people outside aviation circles.

Today, he will have one of his first opportunities to make an impression on the public.

A graduate of UCD, he joined Aer Lingus in 1988, working his way up through the ranks in a number of different roles.

He knows the business inside out and also what exactly a tie-up with IAG would mean for the Irish airline.

He was adept at helping to nurse Aer Lingus during the financial crisis and helping to position it for growth once the economy improved.

His appointment has also been welcomed internally, with a clear signal being sent that executives can be promoted from within the ranks to take the top job at the airline.

Mr Kavanagh has taken on the new role at one of the most pivotal times in the history of Aer Lingus.

That is something he will be fully aware of.

Expect him and chairman Colm Barrington to make a strong case today for Aer Lingus joining forces with IAG.

Irish Independent

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