Aer Lingus board recommends IAG takeover as Walsh issues warning

Aer Lingus board recommends IAG takeover as Walsh issues warning

An International Airlines Group (IAG) takeover of Aer Lingus moved closer after the board of the Irish carrier issued a resounding recommendation of IAG’s €1.4 billion bid at the end of last week.

However, IAG chief executive Willie Walsh warned he would not improve the current offer.

The Dublin Airport Authority, Irish tourism chiefs and industry bodies in Ireland have backed the takeover by IAG, parent company of British Airways.

Aer Lingus chairman Colm Barrington said in a statement on Friday: “The board’s view is that a combination of Aer Lingus with IAG has a compelling strategic rationale and will deliver significant benefits for Aer Lingus, its employees, its customers and for Ireland.”

Barrington added: “It is clearly in IAG’s interests to continue to grow Aer Lingus within IAG.”

Dublin Airport Authority chairman Padraig O’Riordain said: “There may be potential positives for Dublin airport should the takeover proceed.”

Aer Lingus has 23 pairs of slots at Heathrow and IAG issued an assurance last week that the slots “would be operated on Irish routes for at least five years.”

IAG also pledged to maintain the current level of Aer Lingus services between Heathrow and Irish airports Cork and Shannon.

Walsh was in Ireland to answer questions from Irish MPs and to convince the government, which has a 25% stake in Aer Lingus, to approve the sale.

He dismissed trade union allegations that there could be 1,200 job losses at Aer Lingus if IAG gains control, saying Ireland “has nothing to fear” from the takeover.

Walsh said 500 jobs could be created and insisted: “It’s about growing the Aer Lingus network, and with the growth of the network comes jobs.”

Ireland’s prime minister Enda Kenny said last week he sought “cast iron guarantees” on the future of the Aer Lingus slots at Heathrow.

Walsh responded by telling Irish MPs that IAG would offer “a legal cast iron guarantee wrapped in concrete”.

But he warned: “Don’t believe that because I make a proposal that I am ready to improve it. “I can tell you for definite that I am not prepared to increase it.”
Ryanair owns a near 30% stake in Aer Lingus and Gulf carrier Etihad Airways a 5% stake.

There is speculation the Irish government will delay a decision on the takeover until EU competition regulators have decided whether to approve it.

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