International Consolidated Airlines’ Group (IAG) and its chief executive, Willie Walsh, are offering extra guarantees already to the Government and Oireachtas in an effort to convince the coalition to back its €1.36 billion bid for Aer Lingus.
Speaking to the Oireachtas Joint Committee on Transport and Communications yesterday, Mr Walsh said his group would be willing to guarantee that the number of daily flights connecting Cork and Shannon with London’s Heathrow Airport would remain the same should a deal go ahead.
Responding to questions from a number of TDs and senators at the hearing, he said he was prepared to make a committment that Aer Lingus would continue to operate four flights a-day between Cork and Heathrow and three between Shannon and the London hub.
His pledge goes further than the legally-binding veto that IAG is already offering the Government and Cork, Dublin and Shannon chambers of commerce over a sale of Aer Lingus’s take-off and landing slots at Heathrow, and a five-year committment that the slots will only be used to service routes from the Republic.
Government
IAG needs the Government to agree to sell the State’s 25.1 per cent stake in Aer Lingus for its proposal to offer €2.55 a-share to succeed.
However, political opponents of a sale argue that a deal would threaten the airline’s Heathrow rights, seen as critical to the Republic’s access to key markets for tourism and investment.
Mr Walsh has spent two days meeting Government officials, the Minister for Transport, Tourism and Sport, Paschal Donohoe, the Oireachtas commitee and the media in a bid to woo support for the take over bid.
IAG issued a statement yesterday saying that, as a sign of confidence in the Cork and Shannon routes, it is prepared to “enhance” the protections already on offer to the Government by offering a specific committment relating to the services.
“This commitment has been offered following engagement with the Irish Government and in response to concerns raised by, in particular, the Minister of Tourism, Transport and Sport,” it said. “The commitment would apply for five years.”
Throughout the three-hour hearing with the committee Mr Walsh repeatedly stressed that the guarantees offered by IAG are stronger than the existing partial veto that the Government has over the sale of the slots through the State’s 25.1 per cent holding. He pointed out that this only extends to their sale and not to the routes for which they could be used.
Demand
Mr Walsh also stressed that he was not going to increase the five-year guarantee as this would affect his ability to negotiate with the airports. However, he indicated that if demand for the services justified it, the slots could continue to serve Irish routes after that time period was up.
He is also chairman of the National Treasury Management Agency, the body that is responsible for, amongst other agencies, NewEra, which was set up by the Government to advise on the sale of State assets.
Responding to questions from Labour TD Pat Costelloe, Mr Walsh said he would deliberately absent himself from discussions involving Aer Lingus and NewEra.
He pointed out as a former chief executive of the Irish airline, he owns 10,616 Aer Lingus shares and is one of its deferred pensioners. On that basis alone he would have to exclude himself from any talks relating to the company.
