Irish government demands more commitments from IAG

Irish government demands more commitments from IAG

The Irish government has demanded further commitments from International Airlines Group before backing its proposed £1 billion takeover bid for Aer Lingus.

Transport minister Paschal Donohoe said that Dublin needed further clarity on potential job losses and stronger commitments on protecting flight frequencies between Ireland and Heathrow.

The government owns 25% of the carrier from its days of state ownership.

Donohoe said in a statement on the day that Aer Lingus issued its annual results: “The information and commitments that have been provided to date do not at present provide a basis on which the government could give an irrevocable commitment to accept an offer to dispose of its shares.”

IAG has said that it would provide a legally binding permanent commitment not to sell Aer Lingus’s existing landing slots at Heathrow without approval. It has also guaranteed to continue operating Aer Lingus’s existing routes between Heathrow and Ireland for five years.

But Donohoe said a guarantee that Aer Lingus would keep its Heathrow slots needs to be for longer than five years.

He said the information and commitments provided to date by IAG did not provide a basis on which the government could accept the offer.

The minister said the government noted that IAG and Aer Lingus have made positive statements about the overall employment prospects, and the airline itself saw the potential for planned growth in transatlantic traffic to be significantly accelerated.

Donohoe said IAG had provided important new information outlining its vision for the airline but he was still not in a position to recommend acceptance of its offer.

He also said progress had been made on guaranteeing jobs, but further clarity was needed.

More information was also needed on IAG's transatlantic plans, but Donohue conceded that Aer Lingus was satisfied with the level of the cash offer from the company.

However, Donohoe left the door open for further negotiation, saying that the government would consider “any improved proposal which IAG may bring”.

Incoming Aer Lingus chief executive Stephen Kavanagh said that between the existing voluntary redundancy programme and a merger with IAG it could result in 150 to 200 job losses.

He said there would be redeployment opportunities in Aer Lingus and in IAG, confirming a takeover could lead to about 500 new jobs, RTE News in Ireland reported.



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