Friday 24 November 2017

Demands for a guarantee will put this deal out of its misery

Peter Flanagan

Peter Flanagan

IF Taoiseach Enda Kenny wanted to effectively end the chances of British Airways owner IAG buying Aer Lingus, he couldn't have done a better job.

Speaking yesterday, Mr Kenny said he wanted a "cast-iron permanent guarantee in respect of connectivity for Cork, for Shannon, Dublin and a lesser extent Knock", if IAG makes a formal bid for Aer Lingus. From a business perspective, this is nonsense. If the Government sells its shares in Aer Lingus, there would be very little it could do to maintain such a guarantee.

Theoretically at least, there would be nothing to stop IAG making informal pledges and then moving on from them once it suited their business.

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