IAG facing opposition to Aer Lingus takeover

IAG facing opposition to Aer Lingus takeover

British Airways owner International Airlines Group is reported to be struggling to overcome stiff opposition to its €1.36 billion takeover offer for Aer Lingus.

Irish politicians and unions are lining up to condemn the deal despite five-year pledges offered by IAG on maintaining routes between Heathrow and Ireland.

The Irish government, with an eye on an election in 2016, appears to be wary of supporting a buyout.

Transport minister Paschal Donohoe declared himself dissatisfied this weekend after a second round of meetings between IAG and the government, the Times reported.

“We, as a shareholder, remain to be convinced regarding the merits of what they’re putting forward,” he said.

Aer Lingus’s shares have dwindled from €2.45 to €2.21 over the past two weeks, indicating scepticism on the stock market over whether the €2.55-a-share takeover can go ahead.

The Irish state owns 25% of Aer Lingus with a further almost 30% held by Ryanair, which is yet to declare its hand.

A senior government source told Reuters that IAG would need to offer more than a five-year guarantee on the future of services between London and Dublin, Shannon and Cork.

“If IAG are going to do something, they have to do it very quickly if the entrenched positions people have been forced to take are to be unwound,” the source said.

The governing coalition comprises Fine Gael and Labour, which has close links to unions. At a recent meeting of the Labour party, all 20 of the speakers opposed the deal.

Sean Kenny, a Labour party TD [MP] for a Dublin constituency, told Reuters: “We would still be of the view that the state should retain its share until we see something that would alter the situation.”

The Impact union has warned that 1,200 jobs could go at Aer Lingus if the deal goes through. IAG has refused to offer any commitments on employment, but argues that a deal could be beneficial to Dublin’s position as a transfer hub.


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