Limerick TDs ‘unconvinced’ by take-over bid for Aer Lingus

Anne Sheridan

Reporter:

Anne Sheridan

Stakes are high: there has been momentary relief in the Mid-West with news that the Government has turned down IAG's bid for Aer Lingus. Any potential deal will have ramifications for Shannon
FIANNA Fail deputies in Limerick are calling on the Government to turn down the bid to take over Aer Lingus, while Fine Gael deputy Kieran O’Donnell said he “remains unconvinced” by the current proposal, as the “stakes are very, very high”.

FIANNA Fail deputies in Limerick are calling on the Government to turn down the bid to take over Aer Lingus, while Fine Gael deputy Kieran O’Donnell said he “remains unconvinced” by the current proposal, as the “stakes are very, very high”.

There has been momentary relief in the Mid-West after it emerged the Government will not be consenting to the sale of its 25.1% shareholding in Aer Lingus - unless the International Airline Group returns to the table with more favourable conditions - especially in relation to securing slots at Heathrow Airport for more than five years.

Deputy O’Donnell said there is “no firm offer from IAG” at the present and the State is “operating in a vacuum”.

He said while the State is concerned for the “overall impact on Ireland Inc”, as a Limerick TD he is especially concerned for Shannon Airport, now that it has broken away from the Dublin Airport Authority and become independent.

“We don’t want to do anything that would undermine that. We are looking for clarification – especially on the limitation of a five-year guarantee for the Heathrow slots. Shannon is central to regional development and we saw that with Regeneron, which is establishing here due to transatlantic connectivity, as well as Viagogo, which said the link with Heathrow is of paramount importance.

“The stakes are very, very high. My big concern is to ensure connectivity for Shannon –both in terms of Heathrow and transatlantic flights. I’ve had dealing with both Willie Walsh and the Aer Lingus board and I would remain unconvinced about the benefits for this region.”

Fianna Fail deputy Willie O’Dea has now called on the Government to firmly rule out the sale of the State’s shareholding -–especially to preserve the future interests of Shannon Airport and business interests across the Mid-West.

“In the national interest and particularly in the interest of the Mid-West, what the Government must do now is take a firm stand and publicly state that the citizens’ stake in the national airline is not for sale. This is vital, as any such sale could see Aer Lingus’ critical Heathrow slots siphoned off, risking future connectivity and jobs at Shannon airport,” said deputy O’Dea.

“The threat to the valuable Heathrow slots could see the Mid-West’s access to international destinations severely curtailed, as many of the routes to Asia, America and Australia are serviced through the airport,” he said.

Minister for Transport, Tourism and Sport, Paschal Donohoe, has said the State’s share has would not be sold unless the market conditions were favourable, the terms of the sale were satisfactory to the Government and an acceptable price could be secured.

Mr Donohoe said the Government needs a longer guarantee period than the five years being offered on Aer Lingus’s Heathrow slots before he can recommend the company’s bid.

Fianna Fail deputy Niall Collins said he has predicted from “the get-go the Government will sell Aer Lingus” but said they’re merely seeking extended assurances.

“They need to knock this on the head, and say the shares are not for sale. If the bid goes through, in the long-term balanced regional development will be a loser.

“Assurances are meaningless, and there’s so much uncertainty surrounding them. Who’s to say if IAG are taken over themselves the slots will be safe? But in all the briefings on this, the language that has been used indicates that they’re going to sell their shares. It won’t be good for Limerick or the Mid-West.”

The Government wants further consideration by the IAG on employment prospects, potential for growth in transatlantic traffic, including from Shannon, and a permanent, legally binding commitment on the Heathrow slots, as transatlantic routes. “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, should one be made by IAG,” stated the department.

Aer Lingus’ financial results for 2014 show that revenue is up nine per cent, and operating profit is up 18%.