herald

Thursday 19 October 2017

Two weeks to decide the fate of Aer Lingus

TRANSPORT Minister Paschal Donohoe will today update the Government on the negotiations about the future of Aer Lingus and its potential sale to the international group IAG.

The future of lucrative Aer Lingus' landing slots at Heathrow Airport now remain the main hurdle to be cleared before a sale of the taxpayers' 25.1pc share of Aer Lingus gets the go ahead. A final decision is now expected soon after Easter.

Mr Donohoe said the Government had ongoing engagement with IAG after it effectively rejected of the group's proposed €1.4bn bid for Aer Lingus on February 24.

He said both sides had met at the end of last week and he expected the Transport Department will meet the company, headed up by former Aer Lingus boss Willie Walsh, again in the coming weeks.

But the minister said he would not be bringing any proposal on the issue to Cabinet today. Mr Donohoe said both sides have a great deal of work to do if any agreement is to be reached.

He again stressed that he wanted to see the matter concluded in a few weeks. Mr Donohoe said the Government needed to make a final decision as a matter of national priority and of immediate importance to Aer Lingus.

"The fact that meetings were initiated shortly after my rejection of the proposed bid shows there is appetite for engagement on the areas that I stressed were very important," Mr Donohoe said.

"While the conversations are difficult because they focus in on matters that are of grave concern to the North American slots," Ms Burton said.

Sources close to the secretive negotiations have indicated that IAG may be moving to improve the offer rejected last month. IAG was understood to have offered a five-year guarantee that valuable slots at Heathrow would be kept for Irish traffic.

The Government is understood to have sought a 10-year guarantee on this. There is now speculation that a compromise guarantee period of seven years may be offered.

timescale

One Leinster House source suggested a deal can be signed off soon after Easter, which is now just two weeks away. If that timescale held good, a decision would be tabled for Government on April 8. The sale would then have to be approved by the Dail.

While the Government owns 25.1pc of Aer Lingus, rival Ryanair owns 30pc. IAG has already signalled that it wants Ryanair's backing for a sale.

Trade unions at Aer Lingus have also warned that the Government against going ahead with the sale without consulting them.

Equally, Labour backbench TDs will also require some reassuring to ensure the matter does not become a serious source of division in coalition ranks.

hnews@herald.ie

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