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turbulence ahead

IAG's promises on Aer Lingus regional routes are 'entirely unacceptable'

Tourism groups want a ‘cast-iron guarantee’ on Heathrow access.

Updated at 2.40pm

A FIVE-YEAR GUARANTEE that Aer Lingus’s valuable Heathrow landing slots won’t be shifted away from Irish routes after a sale is “entirely unacceptable”, according to the hotels lobby.

Irish Hotels Federation chief executive Tim Fenn said any buyout of the Irish airline by British Airways parent company IAG had “enormous implications” for the country.

“Maintaining strong levels of connectivity with our international markets is of vital importance and, as such, (we have) serious concerns about the sale of Aer Lingus and the prospect of its Heathrow slots being reallocated to other routes,” he said.

Fenn was speaking to an Oireachtas joint committee on transport and communications, which is hearing from tourism and business groups on the proposed airline sale.

IAG has made a provisional offer to buy Aer Lingus for €2.55 a share – valuing the Irish airline at about €1.35 billion.

The government owns a 25% stake in the carrier and any sale of its share needs to be passed through the Dáil, where the deal has run into opposition from most of the main political parties.

In response to the political roadblocks, IAG yesterday offered several commitments, including that it wouldn’t sell Aer Lingus’s 23 valuable Heathrow slots without the government’s agreement.

The company also said it would pledge to operate the slots on Irish routes for five years.

File Photo Minister for Transport Paschal Donohoe has insisted that access and jobs will be core considerations in deciding whether the Government sells its 25.1% share in Aer Lingus. Sasko Lazarov / Photocall Ireland Sasko Lazarov / Photocall Ireland / Photocall Ireland

‘Serious consequences’ for lost connections

But Fenn said any future move to reallocate those slots away from Irish routes – particularly to Shannon and Cork airports – would have “serious consequences”.

He said the government should be looking for a “permanent, cast-iron guarantee” that it would continue to have a say in how those Heathrow landing and take-off places were used for the future.

“The temporary, five-year arrangement proposed by IAG is entirely unnacceptable and needs to be a permanent commitment if any sale is going to be considered by the government,” he said.

Restaurants Association chief executive Adrian Cummins said the issue of airport access was “paramount” in any sale and IAG’s guarantees “didn’t go far enough”.

. Responsible Serving of Alcohol Programme Irish Hotels Federation chief executive Tim Fenn (right front) Leon Farrell / Photocall Ireland Leon Farrell / Photocall Ireland / Photocall Ireland

Business lobby backs deal

But business lobby group Ibec, which counts Aer Lingus as one of its members, backed the move – adding that there were good reasons why IAG would use the takeover as a “springboard” for more growth on transatlantic routes.

Ibec’s Mary Rose Burke told the committee IAG could use Dublin as a secondary transport hub, improving connections between Ireland and other countries.

We do not believe that IAG is seeking to buy the company simply in order to strip assets such as the landing slots,” she said.

Transport Minister Paschal Donohoe this afternoon told the Dáil he expected to have more details about IAG’s proposals this week and they would be “examined very carefully” against issues of connectivity, competition and jobs.

Donohue Transport Minister Paschal Donohoe

“What is at stake here is far more than the price of a share,” he said.

“It is only when I’m in a position to report back to the cabinet and the Dáil with a comprehensive understanding of what has been proposed … that I will be in a position to make a recommendation to government.”

READ: Aer Lingus is seeking voluntary redundancies >

READ: Ryanair is basically running like a massive cash machine >

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