IAG CEO to hold meetings with Irish government, unions in attempt to salvage Aer Lingus takeover
International Consolidated Airlines Group (IAG) chief executive Willie Walsh will hold meetings with the Irish government and unions regarding its bid for Aer Lingus next week, the Financial Times reported. Walsh yesterday, 27 February indicated that he was not admitting defeat in IAG’s bid for the listed Irish airline and that he would hold meetings with trade unions and a review panel of the Irish government following his return from a presentation to investors, the item said.
The Irish government, which holds a 25% stake in Aer Lingus, said on Wednesday that it would want further assurances regarding employment and growth before it would consider selling its stake in the flag carrier. The government is particularly insistent on securing guarantees from IAG that it would retain its slots at Heathrow airport for Irish routes over and above the five year commitment offered by IAG, the item noted.
Walsh this month informed the Irish government that he would not extend the five year guarantee on Heathrow slots. The CEO said IAG was preparing a response to the Irish government’s demands, the article said. Walsh would not rule out making concessions, the item added.
Analysts cited by the newspaper said the Irish government is looking for a guarantee of up to 10 years on Aer Lingus’ slots at Heathrow. However, IAG would find it difficult to justify such concessions on commercial grounds, the analysts added.
One analyst cited by the report argued that the impasse could be broken by concessions on landing charges at the Irish airports that are most concerned about losing connections to Heathrow. However, it is more likely that IAG could provide more clarity on employment at Aer Lingus and expansion of transatlantic routes, while giving non-binding commitments regarding the Heathrow slots slightly beyond its five year commitment, the analyst said.
The Irish Times reported that Walsh will hold meetings with officials from the Irish Congress of Trade Unions and representatives from the Impact and Siptu unions. The unions are looking for reassurances on employment before they would think about supporting IAG’s bid, the item said.
Walsh, quoted in a report in The Times, said IAG’s proposed takeover of Aer Lingus is not a “must-do” acquisition. Walsh added that IAG would not pay too high a premium for Aer Lingus.
IAG has offered EUR 2.25 per share for Aer Lingus, valuing the airline at EUR 1.36bn (USD 1.52bn). Aer Lingus’ share price closed EUR 0.02 up at EUR 2.255 in Dublin yesterday, giving the airline a market capitalisation of EUR 1.20bn.
Financial Times, Irish Times, The Times