Belfast Telegraph

Ryanair may grow flights if IAG buys Aer Lingus

By John Mulligan

Ryanair has said it is likely to boost its services from Ireland if British Airways owner International Airlines Group (IAG) succeeds in acquiring Aer Lingus.

And in the clearest signal yet that Ryanair won't oppose a successful bid by IAG to buy Aer Lingus, Ryanair's chief marketing officer Kenny Jacobs said that the airline "wouldn't have any concerns" if Aer Lingus is bought out by IAG. Ryanair owns 29.8% of Aer Lingus.

"We wouldn't have any concerns about IAG taking on Aer Lingus," said Mr Jacobs. "I think what we've shown in the past year is that we can evolve our business model in a way that we can take on Aer Lingus at any time.

"If they acquire them, it's a good opportunity (for Ryanair) to take more share across Europe," added Mr Jacobs. He also predicted that IAG won't want to take on Ryanair in Ireland using Aer Lingus, especially on pricing.

"We're taking on Aer Lingus on short haul in Europe and clearly winning," Mr Jacobs said.

"It shows what's possible when you have a better Ryanair with the flexibility and changes that we've added, with more primary airports and better frequencies," he said.

IAG, headed by Willie Walsh, has been circling Aer Lingus since before Christmas, when it offered to buy the Irish airline for €2.30 (£1.78) per share. Days after Christmas, IAG increased the indicative offer to €2.40 (£1.85).

But both approaches have been rejected by the Aer Lingus board, which is headed by chairman Colm Barrington.

Analysts expect IAG, which also owns Spanish airlines Iberia and Vueling, will have to increase the offer to somewhere between €2.50 (£.94) and €2.70 (£2.09) per share if it's to have a chance at succeeding in a takeover.

"We haven't been approached yet," said Mr Jacobs, who expects a third bid approach by IAG this week.

"We'll consider a bid that comes to us. We've had our stake on the market for the past year and we haven't had any offers. The ball is in the court of IAG."

Mr Jacobs said he wouldn't expect IAG to significantly reduce the scale of Aer Lingus' operation to and from Ireland, as it has 40% market share.

While Ryanair is awaiting the outcome of an appeal in the UK against an order instructing it to reduce its Aer Lingus stake to no more than 5%, it could inform the UK's Competition and Markets Authority (CMA) that it wants to sell the entire stake to IAG.

The Irish Government, which controls 25.1% of Aer Lingus, will be the key decider in a bid if the Aer Lingus board recommends an offer to shareholders.

Belfast Telegraph