Aer Lingus reiterates backing for IAG takeover

Aer Lingus reiterates backing for IAG takeover

Aer Lingus today reiterated its backing for a £1 billion takeover by British Airways parent International Airlines Group.

The call came as the Irish carrier reported seasonal operating losses for the three months to March 31 of €48.4 million – an almost identical figure to the same winter period in 2014.

Quarterly revenue rose by 7.9% to €254.5 million although total operating costs increased by 6.7% to €328.4 million.

“The board and management team of Aer Lingus strongly remain of the view that a combination of Aer Lingus and IAG has a compelling strategic rationale and will deliver significant benefits to all stakeholders in Aer Lingus,” the airline said.

New chief executive Stephen Kavanagh said: “The IAG offer to acquire 100% of Aer Lingus will deliver significant benefits for all Aer Lingus stakeholders.

“However, notwithstanding the opportunities that this combination will bring, we are focused on building Aer Lingus and improving our return on invested capital performance.”

The IAG offer remains conditional on support from the Irish government which has a minority stake in Aer Lingus alongside Ryanair.

Aer Lingus said a deal with IAG would enhance Ireland’s position as “a natural hub for Europe on the North Atlantic”.

It would also accelerate the Irish airline’s long haul growth plans, increase employment, enhance short haul growth, and strengthen Ireland’s connectivity.

“Aer Lingus has confirmed IAG's intentions to preserve Aer Lingus as a separate operating business within the group with its own brand, management, head office and operations.”

The carrier is to identify additional efficiency measures as part of ongoing cost cutting.

“Achieving cost competitiveness to support margins and to facilitate a flexible response to changing competitive demand conditions is our highest priority,” said Kavanagh.

He described forward trends as being “positive” with the planned start of a new route to Washington and increased frequencies to New York, San Francisco and Orlando this summer.

“In the coming quarters we will focus on capitalising on peak demand opportunities, while aggressively managing our cost base,” said Kavanagh.

“On short haul we will continue our demand-led strategy to drive occupancy, manage per available seat yield and retail revenue per passenger.”

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