IAG could make Heathrow concessions for Aer Lingus deal

International Consolidated Airlines Group (IAG) could make further concessions to the Government on Aer Lingus’s Heathrow access to break the deadlock over its €1.36 billion bid for the airline.

Minister for Transport Paschal Donohoe confirmed that IAG representatives met with Government officials to discuss the group's proposed offer for Aer Lingus. Both sides are due to meet again next week.

Sources now believe that IAG could revamp its offer to tackle concerns on jobs and connectivity, in order to convince the Government to sell the State’s 25.1 per cent stake in the airline.

Last week Mr Donohoe said that IAG’s commitments did not provide a basis on which the Coalition would consider selling the State’s holding, but he added that it was prepared to consider any improved proposals.

Heathrow pledge

Sources say that IAG could be willing to alter its proposal to deal with the Government’s demand that the company extends its pledge on Aer Lingus’s valuable Heathrow rights.

IAG’s initial proposal guaranteed that Aer Lingus’s Heathrow slots would service Irish routes exclusively for five years.

The Government’s concerns hinge on the use of Aer Lingus’s Heathrow slots to service flights from the Republic’s three State-owned airports: Cork, Dublin and Shannon.

A revamped proposal may also include some commitment in relation to jobs at the airline, a key concern of trade unions Siptu and Impact.

IAG's Irish chief executive, Willie Walsh, is due to meet both organisations and the Irish Congress of Trade Unions, in Dublin on Friday.

Mr Walsh told the Government last month that his group is willing to guarantee that the Heathrow rights will be used to service Irish routes for five years if it takes over Aer Lingus.

He also said that the group would ensure that Aer Lingus continued to offer four flights a day to the London hub from Cork and three from Shannon.