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There's plenty to play for before we sell the family airline


Aer Lingus

Aer Lingus

Aer Lingus

If the sale of Aer Lingus to IAG goes ahead it may have a big impact on Irish access to the wider world.

There is little doubt that IAG - which owns British Airways - sees Aer Lingus continuing to perform a valuable function in feeding passengers to its giant passenger factory at Heathrow.

BA now accounts for 51pc of all traffic movements from that airport.

The Dublin-London corridor is one of the world's busiest and BA is already a major beneficiary: many Aer Lingus passengers to and from Heathrow actually travel on BA tickets.

Aviation sources have hinted that Aer Lingus could be asked to base flights to and from Gatwick to cities other than Dublin on BA's behalf.

Rather than retrenchment, Aer Lingus could be looking towards a brighter future.

But what is as yet unsaid is equally discomforting, especially in relation to the much debated Heathrow slots, and with particular reference to the seven daily return flights serving Cork and Shannon.

Local business leaders are already sounding alarms about a possible loss of these slots and the impact this would have on their regions' attractiveness to foreign firms.

Heathrow is one of the world's busiest airports, so busy that it is impossible for airlines to get additional rights (or slots) to fly there.

Plans to construct a third runway are mired in endless political debate, so the only way to obtain slots is by buying them from other airlines, or even by buying other airlines (like Aer Lingus) outright.

Although Aer Lingus only controls 3.5pc of Heathrow slots, it still ranks as the airport's fourth-largest airline, with 330 flights per week. Europe's big airlines, like BA, are increasingly abandoning short-haul flights for more lucrative long-haul services.

There is little doubt that, if it could, BA would convert at least some of the Aer Lingus short-haul slots to long-haul services.

But would that mean an end to the Irish people's long-standing advantage of being able to easily fan out across the globe via Heathrow?

Under the so-called "Golden Share" arrangements - which seeks to protect Aer Lingus access to Heathrow - Government approval is required before any slot disposals take place.

It looks good on paper, but even Government ministers have recently cast doubt on its long-term legality.

At best it would give some short-term protection to the Aer Lingus slots, but after a sale there may be little to prevent the company's articles of association being changed.

However, the Government must first be persuaded to sell its 25pc shareholding and this is really where the State has the whip-hand.

It could insist that Aer Lingus retains a certain number of slots, for Cork and Shannon passengers as well as more numerous Dublin ones.

Ironically Aer Lingus could still theoretically carry the same number of passengers into Heathrow even with half the slots by switching from narrow-body to wide-body aircraft with almost twice as many seats.

This way the same numbers could be ferried across the Irish Sea but the major downside for passengers is the loss of frequency with a longer waiting time in between flights.

A second major stumbling block in negotiations for the sale of Aer Lingus is the 30pc of shares held by Ryanair which is already under instructions from the UK Competition Commission to sell most of these.

Although Ryanair boss Michael O'Leary has ruled out flying into Heathrow there's nothing to stop him changing his mind. He has been doing that a lot lately, with much success as he eagerly courts business passengers. He might well demand a sweetener of a handful of Heathrow slots before he agrees to sell.

Finally, what of the future of Aer Lingus as an independent company, in particular the 3,600 valuable jobs it provides?

Some job losses cannot be ruled out but the overall prognosis is reasonably good.

If, as predicted, BA wants even more flights to be provided by Aer Lingus, that's brilliant news for pilots, cabin crew and ground crew.

But a takeover may also mean duplication of some head office administrative functions and there may be some job losses at that level.

Irish Independent