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Carrier's switch to City Airport legal

Aer Lingus didn’t breach Aldergrove deal when it quit for rival, judge rules

By Alan Erwin

Published 26/06/2015

Aer Lingus was found not to be in breach of 10-year contract
Aer Lingus was found not to be in breach of 10-year contract

Aer Lingus was not under a 10-year contractual obligation to fly out of Belfast International Airport (BIA), a High Court judge has ruled.

The airline was being sued for £20 million in damages over its decision to quit Aldergrove and move its operation to the rival George Best Belfast City Airport in 2012.

Rejecting claims that the switch was in breach of contract, Mr Justice Weatherup held that Aer Lingus only had a pricing agreement with BIA for using it as a base.

He said: "I do not consider the language of agreement is the language of obligation."

A further hearing on the manner of the airline's exit is expected to focus on the notice given.

The Dublin-based carrier's departure came midway through an alleged 10-year deal to fly from Aldergrove.

Legal action issued by BIA centred on the terms of an agreement said to have been reached back in June 2007.

Counsel for the airport claimed a letter drawn up at the time and sent to Aer Lingus by his client's former managing director amounted to a binding 10-year contract. It followed months of negotiations as the airline sought a base outside the Republic.

Issues under discussion were said to include charging rates and £900,000 in launch support for the three Airbus A320s over the first three years.

A senior BIA executive told the court it was then "blind-sided" by Aer Lingus negotiating with its main competitor, the City Airport.

The airline's chief executive insisted it only ever entered into a pricing arrangement for flying out of Aldergrove. According to Stephen Kavanagh, his company lost up to €44m having a base there.

The move to Belfast City was because Aer Lingus could not make its arrangement at BIA work, the court heard.

Ruling on the case yesterday, Mr Justice Weatherup admonished the defendant for wasting time and being "elusive" in setting out its position on the contractual arrangement.

After exploring all the evidence, he said: "I'm not satisfied that the plaintiff's claim that the agreement imposed an obligation on Aer Lingus to operate a base for 10 years."

The judge added that if the agreement had been drawn up in more legal terms by solicitors it may have achieved more - although perhaps then the airline would not have signed up to it.

A further question on whether Aer Lingus was entitled to terminate the arrangement in the way it did is still to be determined, he pointed out.

Mr Justice Weatherup also noted: "The plaintiff BIA and Belfast City Airport are unique in being half-an-hour away (from each other) in a regional centre. Each is competing with the other.

"To have Aer Lingus based at BIA was a coup for BIA."

Turning to the costs of the case, involving a six-day hearing, he said expense was created by the airline's equivocation.

"I'm minded to order the defendant to pay half the plaintiff's costs," he said.

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