Aer Lingus to become part of IAG?

By | Category: Travel rumblings

AerLingusPaschal Donohoe is not only the Irish minister for transport, he is also minister for tourism. As such, when he raises the issue in the Irish cabinet today about the IAG takeover of Aer Lingus, he should be in a well-briefed position to look at what any impact the takeover might have.

Just to remind readers, IAG is the holding company for British Airways, Iberia, Veuling and it also owns Avios the frequent flyer system used by those airlines and Flybe, an airline in which IAG used to have a near 15% stake until it sold out last June.

The concerns that many Irish have is that there will be fewer number of flights between London and Dublin and that jobs may go. From a traveller’s point-of-view, a combined BA/Aer Lingus tie-up, potentially removes a competitor for the market which means passenger fares might rise. There might be fewer flights as well. That two opposition parties, Sinn Fein and Fianna Fail, have called on the government to reject the takeover without seeing the fine print suggests political grandstanding rather than considered thought.

Whatever happens I can’t see the competition authorities allowing the deal to go ahead without their being some reduction in the number of combined slots IAG would have at Heathrow. For the traveller from the south east of England, there is little choice if you want to have a full day in Dublin. The first Ryanair fight from Gatwick won’t get you into Dublin city centre much before midday so it has to be a BA or Aer Lingus flight.

Willie Walsh, the head of IAG, an Irishman and former head of Aer Lingus is going to have to persuade passengers and the Republic that the deal will be good for them. Until then it is right that there should be some scepticism. Not only will there be Irish hurdles to cross but the EU will undoubtedly investigate the deal so any takeover won’t take place in the next month or so.

Finally there is an unquantifiable hurdle. Will the Irish accept having their national airline being owned by foreigners?

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