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IAG offers Aer Lingus sale pledges


IAG tabled a £1 billion offer for Aer Lingus last week

IAG tabled a £1 billion offer for Aer Lingus last week

IAG tabled a £1 billion offer for Aer Lingus last week

The owner of British Airways has ratcheted up pressure on the Government to agree the takeover of Aer Lingus with the offer of a five year guarantee on crucial Heathrow slots.

Willie Walsh, head of the International Airlines Group (IAG), also committed to keep the Irish flag carrier headquartered in Dublin and an agreement never to sell its landing rights at the London airport.

"We are committed to maintaining and strengthening Aer Lingus," Mr Walsh said.

"We want to develop air services that ensure Ireland's connectivity is enhanced. In seeking the support of the Irish Government, we propose to offer it legally binding commitments that go well beyond the protections currently available to it.

"These commitments would give the Irish Government an important role that they do not have today in securing the future of Aer Lingus."

IAG tabled a £1 billion offer for Aer Lingus last week with the carrier's board prepared to accept it at 2.55 euro a share, but the Government is a significant player in the proposals as it holds a 25.1% stake in the carrier.

Mr Walsh, who initiated a turnaround in Aer Lingus' fortunes before joining BA, said the original offer highlighted the importance of direct air services and connectivity for investment and tourism in Ireland.

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In a follow-up statement to the stock exchange today, IAG said it believes a takeover would secure and strengthen Aer Lingus' long term future and brand as a member of a successful and profitable European airline group. It said it would offer significant benefits to both the airline and customers.

IAG outlined a series of initiatives it was prepared to put on the table to win the support of the Government.

Among them are a commitment not to sell Aer Lingus' 23 Heathrow slots, another to keep the Aer Lingus name and assurances that the head office location or place of incorporation would remain in Ireland.

Crucially though, IAG also offered to operate the Heathrow slots on Irish routes for five years - a protection, it said, the Government does not currently have.

IAG said it plans to operate Aer Lingus as a separate business with its own brand and management and to continue to provide connectivity to Ireland, while allowing it to benefit from being part of the larger airline group.

It said Aer Lingus would be part of the joint business that it operates over the North Atlantic with American Airlines, taking advantage of Dublin's geographic position.

IAG added: "This is significantly enhanced by US immigration pre-clearance."

The prospect of a sale is a political mindfield for the Government with an election within a year and a series of Labour Party members - the junior party in coalition - set against a sale unless they see cast iron guarantees on connectivity and jobs.

Currently, Aer Lingus directly employs 3,900 people, mostly in Dublin, with 2,100 of these described as ground staff in areas such as clerical, operative and back office roles.

There are also fears over what a sale would do to the airline's presence in Cork and Shannon.

Aer Lingus is the fourth busiest operator at London's Heathrow behind British Airways, Lufthansa and Virgin Atlantic.

The trade union Siptu, which represents more than 50% of the workers at Aer Lingus, called for the sale to be blocked unless they get guarantees.

The Irish Airline Pilots Association, which represents 500 Aer Lingus pilots and owns a 7% share in the airline, said management had a conflict of interest as they stand to make a windfall from any sale.

The trade union Impact, which represents some pilots, cabin crew and ground staff at Aer Lingus, said the acquisition would result in up to 1,200 jobs slashed in Ireland.

Paschal Donohoe, Minister for Transport, Tourism and Sport, said: "I note the statement from IAG this afternoon and will examine the details very carefully."

Impact reacted to IAG claiming the commitments were unconvincing.

The union's national secretary Matt Staunton said: "A commitment not to sell the Heathrow slots is no guarantee that the use of the slots wouldn't change.

"IAG would be able to change the use of these slots as they pleased, including a transfer of use to another airline, without having to sell them. Similarly, a commitment to maintain the slots on Irish routes for five years means we have no guarantees on connectivity to Heathrow beyond that time limit."

Mr Staunton said IAG had done very little to ease the concerns of those opposed to a takeover.

"What really stands out in the statement by IAG is the complete absence of any reference to jobs," he said.

"We've highlighted a substantial risk of job losses at Aer Lingus if it's acquired by IAG. There's nothing in IAG's statement that lessens our concerns about Aer Lingus jobs."

Mr Staunton said trade unions, chambers of commerce, the tourism industry and multinationals trading in Ireland have all voiced their opposition to the takeover.

A parliamentary committee in Dublin will continue to explore the potential fallout if the takeover goes ahead.

Enterprise and investment chiefs from IDA Ireland will be asked their views with lobbyists from the business body Ibec and tourism experts from the hotel and restaurant sector.

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