Aer Lingus Says IAG Bid Coincides With Need for ‘Deeper’ Partner
Published on Feb 17 2015 8:48 PM in General Industry
Aer Lingus Group’s chief executive officer-designate said a bid approach from IAG comes at a time when the Irish carrier has been mulling the need for a partnership and presents a “fast-track” growth opportunity.
“What IAG brings to us is that ability to join forces,” Stephen Kavanagh, who takes over as CEO on 1 March, told the Irish parliament’s transport and communications committee in Dublin, adding that Aer Lingus has been looking at seeking a “deeper level of cooperation with a stronger partner.”
IAG’s €1.36 billion ($1.55 billion) approach “has a compelling strategic rationale,” Aer Lingus Chairman Colm Barrington told the hearing, with the deal likely to generate more than 500 jobs over five years and grow the carrier’s long-haul fleet from ten planes now to “close to 20.”
“This deal is about accelerated growth,” benefiting employees, customers and Ireland, the executive said.
IAG CEO Willie Walsh, a Dubliner and Aer Lingus chief until 2005, appeared before lawmakers last week in a push to convince them, Irish voters and workers that his bid for the airline won’t result in the loss of jobs and flights to London.
“We’re not invalidating our current strategy,” Kavanagh said today of Aer Lingus’s enthusiasm for the takeover. “The issue is the balance of opportunity, which would be increased, and risk, which would be decreased.”
Kavanagh added that a deal would bring significant economies of scale and revenue benefits an improved global reach that together present an “incremental opportunity.”
Walsh has said a firm offer is dependent on the government accepting its bid, and is also looking to secure backing from Ryanair Holdings Plc, which owns close to 30 per cent of stock.
Health Minister Leo Varadkar earlier this week became the latest senior Irish politician to express reservations about a deal, even after Walsh offered safeguards protecting routes from some regional airports, adding to assurances on not selling Aer Lingus’s slots at London’s Heathrow airport.
Bloomberg News, edited by Hospitality Ireland