Belfast Telegraph

Wednesday 3 September 2014

Walsh: Aer Lingus can only be secured by a merger

Willie Walsh, the former Aer Lingus chief executive, believes the future of the airline can only be secured if it merges with another airline.

Aer Lingus is currently attempting to save €100m in costs by |cutting 670 jobs in the Republic, although the airline’s Belfast |operation will not be affected.

Speaking at the Jim Kemmy Business School at the University of Limerick yesterday, Mr Walsh said various factors have led to an uncertain future for Aer Lingus.

“Given what has happened to the economy here and given the way Aer Lingus has struggled in recent times, you could now make an argument that its future as an independent carrier is not that secure and maybe Aer Lingus does need to look at a relationship with some other carrier or a number of other carriers,” Mr Walsh said.

However, he said the current ownership of the national airline will make it difficult to attract new investors.

“With Ryanair a significant shareholder at 30% and the Irish government with 25%, Employee Share Ownership Trust with 15%, I struggle to see how anyone would invest or would want to invest with that sort of structure,” he said.

Regarding a proposed takeover of Aer Lingus by Ryanair, Mr Walsh said he always found it “a challenge” to see why Ryanair would want to control Aer Lingus.

“There are serious competition issues and there is a very significant overlap between Aer Lingus and Ryanair and the competition regulators will always struggle with that.”

“I wouldn't say a Ryanair-|Aer Lingus merger is impossible, but it would be very difficult.”

“If you look at the theory |of competition, the consumer couldn't win with the two firms being merged. That competition would disappear.”

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