Assurances sought over Shannon - Heathrow link

Mike Dwane

Reporter:

Mike Dwane

Aer Lingus has rejected a takeover bid from IAG
LABOUR’S Deputy Michael McNamara has sought a guarantee from government that Shannon will maintain links to Heathrow in the event of any takeover of Aer Lingus.

LABOUR’S Deputy Michael McNamara has sought a guarantee from government that Shannon will maintain links to Heathrow in the event of any takeover of Aer Lingus.

A bid from British Airways’ parent IAG was rejected by the board of Aer Lingus in the days before Christmas. Estimated at around €1 billion, the approach had “fundamentally undervalued” Aer Lingus, the airline said.

But with a further bid likely in the new year, Deputy McNamara is urging the government to avoid a repeat of the fiasco in 2007 which saw Shannon lose its Aer Lingus services to Heathrow.

In a letter to the Minister for Transport Pascal Donohoe, Deputy McNamara urges the government to use its 25% stake in Aer Lingus in the interests of the Shannon region.

“I note reports in the media quoting you as having said the government ‘remains open to the sale’ of its stake in Aer Lingus in the context of the approach from British Airways’ owner IAG,” states the County Clare TD.

“I would appreciate assurance that any sale by the government would be contingent on maintaining Heathrow slots for Shannon flights and that this would be legally binding in the event of a sale.

“Maintaining connectivity from Shannon to London and beyond via Heathrow is key to the economic future of the Mid-West, an area that has not benefited as much as others from the recovery,” Deputy McNamara stated.

Aer Lingus owns over 20 pairs of slots at Heathrow and these valuable assets are part of the reason the airline is such an appealing takeover prospect.

But business interests in the region fear that a foreign owner would have no qualms about transferring the Heathrow slots elsewhere.

The decision by Aer Lingus in 2007 to switch Shannon slots to Belfast caused outrage in Limerick and Shannon. And while Minister Willie O’Dea compared then Aer Lingus boss Dermot Mannion to Oliver Cromwell, the government said it would not use its 25% stake to interfere in commercial decisions at a private company.

Two Heathrow slots were returned to Shannon at the beginning of 2008 while the route now operates three times a day.