Wednesday 21 February 2018

Curious behaviour may have scared off other airlines

The antics around the Aer Lingus sale clearly shows the folly of having politicians as minor shareholders

Willie Walsh
Willie Walsh
Willie Walsh, CEO of International Airlines Group pictured earlier this week when he held a press conference at the Westbury Hotel, Dublin (Colin Keegan)
Colm McCarthy

Colm McCarthy

If the Ryanair board agrees to sell its 29.8pc stake, Aer Lingus will become the fourth member of IAG, the International Airlines Group, along with British Airways and two Spanish carriers, the former state airline Iberia and the low-cost operator Vueling.

The Middle East carrier, Qatar Airways, is a 10pc shareholder in IAG and the group also cooperates closely with American Airlines, as well as with numerous other airlines around the world through the Oneworld alliance. Aer Lingus will continue to operate as a distinct company but will become the latest recruit to one of the major international groupings in an industry experiencing rapid consolidation.

At one time, each European government owned its own national airline, many of them established in the 1920s and 1930s. The governments participated, quite openly, in a fare cartel and opposed the entry of low-fare carriers. Routes were parcelled out between the government-owned airlines and fares were kept at very high levels.

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