IAG to guarantee Aer Lingus Heathrow slots

Barry O’Halloran

International Consolidated Airlines Group (IAG) has moved closer to a take over of Aer Lingus by offering to guarrantee its landing and take-off rights at Heathrow Airport should its bid for the company be accepted.

IAG has been discussing its proposal to buy Aer Lingus for €1.36 billion with the Government since the Irish airline’s board signalled that it was willing to support such a deal.

In a move designed to convince the coalition to allow the sale of the State’s 25.1 per cent stake in Aer Lingus, IAG is formally offering to give legally-binding guarrantees that the airline’s 23 slots at Heathrow cannot be sold without the Government’s agreement.

IAG'S Irish chief executive, Willie Walsh, says in a statement that in seeking the Government's support, the group is is proposing to offer it "legally-binding commitments" that go beyond the protections currently available to it.

"These commitments would give the Irish Government an important role that they do not have today in securing the future of Aer Lingus," he adds.

Politicians and business groups fear that a sale to IAG could result in Aer LOIngus losing the slots, which are regarded as vital to maintaining the Republic’s links with key markets.

Estimates of the slots’ value range from around €400 million to figures as high as €900 million.

However, one of the reasons that the State kept a stake in the company when it floated in 2006 was to give the Government a veto on the sale of the slots, which allow Aer LIngus to take off and land at the airport, which is Europe’s biggest international hub.