Relief as Aer Lingus sale terms flown back to IAG

Anne Sheridan

Reporter:

Anne Sheridan

Minister Paschal Donohoe, pictured last week on a visit to Foynes, wants further commitments by the IAG on several aspects of its Aer Lingus sale. Picture: Sean Curtin
THERE was relief in Limerick after it emerged that the Government will not be consenting to the sale of its shareholding in Aer Lingus - unless the company returns to the table with more favourable conditions.

THERE was relief in Limerick after it emerged that the Government will not be consenting to the sale of its shareholding in Aer Lingus - unless the company returns to the table with more favourable conditions.

Business leaders in Limerick and throughout the Mid-West had expressed concern for the sale of the airline to the International Airlines Group, and the implications for Shannon Airport and the wider economy.

Minister for Transport, Tourism and Sport, Paschal Donohoe, has said the 21.5% stake which the State has in Aer Lingus 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.

Fine Gael deputy Kieran O’Donnell was among those who wanted a longer guarantee period, saying “five years is a very short period in the business and tourism cycle.”

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.

“Assurance 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 all the briefings on this, the language that has been used indicate 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 well as the share price.

“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, also released yesterday, show that revenue is up nine per cent, and operating profit is up 18%.