International Consolidated Airlines Group is "nowhere near" walking away from its €1.36 billion bid to buy Aer Lingus, according to its Irish chief executive Willie Walsh.
Mr Walsh stressed yesterday that IAG, which owns British Airways and Spanish airlines, Iberia and Vueling, is not willing to allow the political storm that has blown up since it initially approached Aer Lingus in December to scupper any deal.
"This is a deal that we want to do," he said following a meeting at which he outlined his company's plans for Aer Lingus to Minister for Transport Paschal Donohoe.
He added that the group has the resources to dedicate people to work on securing the takeover for however long it takes and said it is “nowhere near” the point at which it would consider walking away.
IAG has been in talks with the Government, responsible for the State’s 25.1 per cent holding in Aer Lingus, for two weeks. Political opponents of a deal fear that if the Irish airline is sold, the group will take its valuable access rights at Heathrow Airport and use them for lucrative long-haul services rather than for Irish routes.
Slots
The slots, as they are known, are seen as critical to the Republic’s links to key tourism and investment markets. When the then government floated Aer Lingus in 2006, it kept 25 per cent to ensure a partial veto over any sale.
IAG is offering the Government and the Dublin, Cork and Shannon chambers of commerce a legally binding veto over the sale of the slots if takes over Aer Lingus.
It is also prepared to guarantee that they will only be used to serve routes to the Republic for five years.
Mr Walsh argued that what IAG is offering is a better guarantee of the slots’ future than the veto the Government now has, which only applies to their sale, not the routes for which they are used.
He pointed out that in 2007, the government was unable to prevent Aer Lingus switching Heathrow slots used to serve flights to and from Shannon Airport to Belfast, a move that sparked protests in the midwest.
Bargaining power
Responding to calls for the five-year guarantee to be increased, he pointed out that this would limit his bargaining power with airports, something that “any airline would be crazy to do”.
Mr Walsh is a former Aer Lingus pilot who rose to be the airline’s chief executive between 2001 and 2005.
He left the airline after a failed bid to privatise it which drew stinging criticism from then taoiseach, Bertie Ahern. BA hired him as chief executive and he subsequently merged it with with Iberia in 2010 in to created IAG, one of Europe's biggest airlines.
He will face the Oireachtas Joint Committee on Transport and Communications, whose members includes a number of politicians opposed to an Aer Lingus sale, this afternoon.
Ryanair, which owns 29.8 per cent of Aer Lingus, is due to hold a press conference in Dublin today. The UK court of appeal is due to rule on a case relating to that shareholding at about the same time.
IAG first approached Aer Lingus in December. It is prepared to pay €2.55 per share, a total of €1.36 billion for the company. The Aer Lingus board has already said that it is prepared to support such an offer.
