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Friday 15 December 2017

Aer Lingus profits up as sale row continues

A takeover of Aer Lingus by IAG would deliver significant benefits for the airline, the carrier's chiefs have said
A takeover of Aer Lingus by IAG would deliver significant benefits for the airline, the carrier's chiefs have said

THE incoming chief executive of Aer Lingus has refused to reveal the value the company has put on its Heathrow slots.

Chief executive Stephen Kavanagh said today that the airline needed investment of about €2bn.

When he was asked about previous valuations of Heathrow slots, he said: “The valuation depends ultimately on the market.”

“Ultimately the value on offer reflects the value of the business. It offers the option of growth. This will result in the creation of jobs, more economic activity and real value because of the global strength of IAG.”

CLAIMS

He also rejected claims by unions that up to 1,200 jobs could be lost if IAG comes on board.

“IAG is not an airline, it’s an infrastructure company that invests in airlines,” he said.

“In the airline business cost cutting is never at an end. Processes become redundant.”

This morning, Aer Lingus reported operating profits of €72m, up 17.8pc for the year ended December 2014.

However, the airline reported an overall loss of €95.8m when the €190m provision for its pension costs are included.

Aer Lingus last year agreed to a new plan to provide €190m to establish a new defined contribution pension scheme for staff to replace the IASS which was drafted by a government-backed expert panel.

Commenting on the results, the Aer Lingus chairman Colm Barrington also reiterated the board’s support for the €1.4bn bid from IAG.

The airline said today that total revenue for 2014 was up 9.2pc to €1.6bn, compared to €1.4bn in 2013.

During 2014 Aer Lingus’ total network passengers surpassed 11 million for the first time in its history.

Meanwhile, Labour is expected to ramp up opposition to the €1.4bn Aer Lingus takeover.

An emergency motion opposing the sale of the State’s stake in the airline will be put before Labour members at their conference in Killarney this week.

An expected vote in favour of the motion will cement opposition to the deal and leave Fine Gael with a major headache.

Last night, former minister Pat Rabbitte admitted he is a lone voice in his support of the Government selling its 25pc stake in the airline to international aviation giant IAG.

The growing unease in Labour comes as Aer Lingus unions held fresh talks with the company’s chief executive Stephen Kavanagh and IAG chairman Willie Walsh.

Earlier, unions disowned comments by secretary of the airline’s group of unions Myles Worth, who suggested workers were warming to the IAG deal.

Government sources said they were “bemused” by the “shambolic” union row and insisted it would have no impact on its decision.

The Herald understands senior Labour figures are drafting an emergency motion on the Aer Lingus deal that will be put before the membership in Killarney on Friday.

The exact wording of the motion has yet to be determined, but it will voice strong opposition to the deal.

If members vote in favour of the motion, Labour opposition to the sale will be copper-fastened in party policy and Tanaiste Joan Burton would be forced to reject the deal.

The motion is being prepared by members of the so called Aer Lingus 7, a group of mostly North Dublin TDs who have been adamantly against the sale from the outset.

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