Sign in. It’s quick, free and it’s up to you.
An account is an optional way to support the work we do. Find out more.
IAG BOSS WILLIE Walsh has continued his publicity push over the group’s buyout of Aer Lingus as the focus turns to how Ryanair will play its hand in the deal.
The government yesterday decided to back IAG’s €1.4 billion buyout of the Irish airline after a four-month courtship aimed at unlocking the state’s 25% stake. The deal values the taxpayer-owned share at about €335 million.
It came after the airline group, which includes subsidiaries British Airways, Iberia and Vueling, offered an open-ended commitment to keep Aer Lingus’s valuable London Heathrow slots in the national carrier’s hands.
IAG also wooed the government, which was facing a potential backlash from those reliant on regional airports, with a seven-year pledge to maintain existing connections between Heathrow and Dublin, Cork and Shannon.
At a press conference today, Walsh said Aer Lingus customers would also benefit from more routes to and from Ireland, and better connectivity through IAG’s network.
“As part of IAG, Aer Lingus would have stronger buying power, stronger selling power, more ability to grow and more security to weather the slings and arrows of our industry,” he said.
Ireland will be a major beneficiary of this deal as it will boost economic growth and create new jobs.”
The key IAG promises Transport Minister Paschal Donohoe yesterday highlighted and the group’s chief was at pains to reiterate today were:
Unions have been fighting the deal on the grounds it would be bad for Aer Lingus workers and for the country, and Walsh today confirmed an expected 50 staff would go from the airline in the short term – although the overall headcount would increase.
There will be duplication … and that will result in some job losses in back office activities, principally in finance and in IT,” he said.
So what now?
With the deal set to be rubber-stamped by the Dáil tomorrow with the blessing of both Fine Gael and Labour, IAG’s attention will turn to Ryanair – which still has the power to stymie the buyout – notwithstanding it getting the approval of competition regulators.
The Ireland-based budget carrier has built up a near-30% stake in Aer Lingus and previously launched several unsuccessful takeover attempts.
More recently, Ryanair was ordered by the UK’s competition watchdog to sell down its share to 5% – a decision the airline has been fighting since 2013.
IAG said its proposal was conditional on both the government and Ryanair agreeing to hand over their stakes, however the Aer Lingus suitor has until now focussed its attention almost exclusively on convincing the state owners.
Walsh said IAG would issue formal offer documents to Ryanair within 28 days and he believed it presented a “compelling argument” for the deal to go ahead.
I expect Ryanair to behave in a rational way, as they are a well-run business with proper corporate governance. They have been very clear they will consider the offer when the offer is made.”
However he warned IAG wasn’t expecting to make any concessions to Ryanair and the €2.55-per-share offer for Aer Lingus was the highest it was prepared to go.
Meanwhile, Ryanair has been giving little away about its position. As part of its annual results announcement yesterday, when the company showed a 66% rise in profits for the year, CEO Michael O’Leary said the airline still believed the UK competition ruling was “untenable” and it should be allowed to hold onto its piece of Aer Lingus.
In the meantime, our approach to any IAG offer for Aer Lingus is unchanged – should Ryanair receive an offer from IAG the board of Ryanair will consider it in due course on the merits,” he said.
To embed this post, copy the code below on your site
2 things worth noting which have emerged today:
1. enda kenny apparently never read an internal report describing job losses and transferral of services to eastern Europe.
2. The ‘guarantee’ received that there will be no job losses amounts to the following ” …we have received a commitment from Stephen Kavanagh and from Aer Lingus that they do not foresee the use of compulsory redundancies ”
Not a commitment that there WON’T be compulsory redundancies, a commitment that they DON’T FORESEE any.
The State is simply selling shares in a public listed company at a premium. what’s not to like?
Asset stripping the Irish people to buy the next election is whats ‘not to like’.
Did deputy Adams mention brown envelopes in the Dail today?
Something to note about ‘were jamming’, he uses the with ‘apparently’ in an attempt to chastise the government for using the word ‘could’ but doesn’t see the irony in thus.
He mentioned ‘backhanders’, and the major cash windfalls the Aer Lingus top brass, who recommended the sale, stand to make. Martin mentioned the NYRAS report. Apparently kenny and the cabinet decided to sell their 25.1% without seeing an internal report from Are Lingus outlining “ground handling cuts of 20%, catering 40%, maintenance 15% and heavy maintenance, which would go to Eastern Europe 25%”
They know that information now (as if they didn’t before) and are STILL selling.
Another scandal about to be siteserv’d up thanks to these cretins.
Sorry Jammin I bow to your superior ears ☺
‘Were jamming’ I’d EI makes a commercial decision to rationalise or outsource what do you think the government with 25% holding could do about it? What did the government when EI cut routes from Dublin this past 8 years? You’re delusional. You’ve no concept of business or economics.
Jammin – and SF/IRA – are not noted for their economic prowess.
A 25% shareholding is useless.
A pair of corporate sharks like Michael O Leary and Willie Walsh controlling the vast bulk of air travel for a captive island population. What could possibly go wrong?
WJ
Heavy maintenance is already done in France
Catering has being cut already
Ground handling wont be cut as the fleet increases.
Lot of apparently”s……
WJ
You seem not to realise the Government couldn’t stop any of these if they retained their share.
Did they stop the 2000 job cuts in recent years????
As opposed to O Leary and mueller up until last month? What Exactly went wrong all these past years can you remind me? The only time Ireland had issues were union strikes in EI, and unionised air traffic controllers in France. So, again, what do you envision is going to dramatically happen?
What don’t you think the government with a 25% stake in a business could do Jason? From looking at your reponces it appears to me that its you that no idea how a business is run or what a shareholder is?
Are you a share holder in a business Jason? Would you like me to tell you how it works when shares in a business, and that business wants to change the way how that business is run?
They can’t do a thing with 25%. That’s the whole point. Not a thing. Only keep it or sell it. They’ve sold, which is the right thing to do.
Just a matter of time now until some religious looney will start spouting that Ireland’s loss of our flock of green birds I.e arelingus is the result of the yes vote in the referendum. Just wait people it will happen.
Dont be surprised if O’Brian raises his ugly head in all this.
I’d be very interested in how this money is spent. This is the tax payers money and it should be invested proportionately throughout the country.
Jason,
The Irish state whether governed by Fine Gael or Fianna Fail has always largely served the interest of domestic and international capital over the majority ordinary citizens. Fianna Fail bail out the bondholders and destroy the nation economically which opens up juicy opportunities for Fine Gael connected business interests to feed on the carcass such as the Siteserv deal. The sale of the government stake in Aer Lingus is just the latest example of this trend.
IAG is owned by international investors (Standard Life Investment, Europacific Growth Fund etc) whose sole reason for holding the shares is to generate profit. If maximizing “shareholder value” in the years to come involves cutting routes from Cork, Shannon etc. then that’s exactly what IAG will do after all the puff and spin from Willie Walsh and the government has evaporated after the sale. The interests of the Ireland’s people are of precisely no concern to international capital.
@ Tom : “I’d be very interested in how this money is spent. ”
AFAIK half of the sale goes straight to the troika. I stand to be corrected to this, and hope I’m wrong.
It was decided a long time ago to find a buyer and sell, IAG seems like the best candidate. He just doesn’t like that it’s not SF conducting the sale and calling the shots.
These people are in a mission to make this government look as bad as possible, make Ireland the next Greece and revel in the anarchy.
Drew – Is that how they do things in China – where you claimed recently to work in ?
Are the Chinese Take Aways good there ?
Or is it Arklow “China” that you were referring to ?
You should get the bus to Letterkenny with Baz ???
Wrong again werejammin, just like your pal Dessie Ellis, who is a fool and a failure and showed himself as such on Morning Ireland this morning. None of the money goes to the Troika as EI is not on the balance sheets as an asset. How could it be when the state’s share amounts to just a quarter of the company?
Everyone (including workers) bar the leftie loonies is in favour of this, But sure what do they know. Claire Daly stated on Sean O’Rourke this morning that there was no need for integration with IAG because Aer Lingus were in the One World Alliance. They haven’t been since 2007. She said the deal was “outrageous”. What’s outrageous is her lack of awareness.
But that’s the lefties and the Shinners and AAA/PBP. No change, stand still, get left behind. Greece about to go bust due to leftie intransigence but the loonies here still think it’s the way to go.
Waffler, stop waffling and address the points. But I guess you can’t.
Its not Irelands company anymore.
Cant even mention Ireland in the same sentence with France, they make their own planes.
Maybe not Jason, but they could keep the the Country going, now Willie Walsh can do as he pleases.
the main question is were does the money go from sealing our share let me guess to pay germanys national death
You’re wrong, like most people on here. Even a cursory glance at some of the articles and comments on this will tell you exactly where the money is going.
The country is back on feet ya right 300,000 people still out of work including jobs bridge schemes etc.. 100,000 people abroad banks are getting greedy i think mini rescission on the way. Air lingus sold ,forestry sold, cas fields sold, oil fields sold, national lotto sold,bus eireann the lucas on the cards, irelands real estate sold to pay someone elses death irish water will be sold and irish people sold.SF had no hand in any of the above.
ya what ever paying road tax since the mid 90s were did that money go certainly not to the upkeep of our water systems like it was supposed to and please dont mention roads i wouldnt belevae there radio people like you are ignorant to whats going on alan
Denis O’Brien must have order the sale so nothing else counts or matters when the rust bucket of filth commands his bumboys
Tom, maybe you should be asking what previous governments did with the 75% they sold off.
YOU DONT SELL A BUSINESS THAT IS MAKING MONEY…FULL STOP
So wonder will the pot be sweetened for the top union people by IAG as it already has by governments over the years.bought and sold. There was a time when, and I’m going back to the seventies the unions meant something. Not any more. Just take the script from the brothers and award themselves with big salaries and cars.
Hopefully Ryanair holds onto there share they are the only ones who can put a stop to this mess now!! Is there no self pride in our country anymore!
Yes their biggest competitor holding 30% of the airline, good for consumers not…..
Ronan M – Is your the Official FG / Lab.
Party line ?
This is a disgraceful sell out – Typical of your Corrupt Party !
An ciarroch, ff sold EI in 2006.
AC
Its reality, the funniest thing is the left are always complaining about the cost of flights with Aer Lingus yet are I opposed to sale…..
New route from Cork being announced immensely and drive inbound tourism!
Jason – and your point is ?
Would you like us to add FG / Lab. & FF as equally as corrupt as one another ?
Yes I fully agree with you that they are – Equally Corrupt !!
If Ireland inc kept EI there would be no EI now. How much state money have we put into it since it’s inception? EI has been a basket case for most of it’s existence.
The amount of rubbish, emotive, wrap the Irish flag around us arguments in this debate is unbelievable. Aer Lingus is not a public, state-run company, and hasn’t been for nine years. What it is now and what people think it symbolises are entirely different. The state sold 75% of its share in it because it became a basket case and successive governments couldn’t fund its development.
It is what it is – a private run airline with various shareholders. There are few state-run airlines in Europe because it makes no economic sense. And RyanAir is no golden eagle ready to swoop down to save the day and scupper the IAG bid. O’Leary will play hardball for a few months with IAG, but ultimately once RyanAir’s attempts to take control of Aer Lingus were rebuffed, those shares had little value. O’Leary can’t wait to shed those shares and cash in on IAG’s offer.
The government has been given assurances in some areas (base, slots, branding) that no other government would have got from IAG. And that’s because IAG recognise the power of the AL brand and there is no long term value in diluting it. Aer Lingus can’t improve connectivity, invest in expanded routes and fleet in the position they currently are – their profit balance sheet is a splash in the ocean compared to other similarly sized airlines.
Once the government sold off its share in AL, that was it – no going back, unless you want the Irish government to row back and trouser out the billions+ it would take to buy back AL.
If Ryanair bought Aer Lingus wouldn’t they be direct competition to IAG not to mention it would turn Dublin Airport into an international hub between North America and Europe? Also, why is a UK authority allow to rebuff an Irish merger?
True Andrew, never thought that O’Leary might do the job that Government were elected and failed to do and which is to prevent treachery by the actions of this corrupt government
why was ryanair not given the chance to purchase the air line..KEEP IT IRISH
Without entering the argument I’d like to know why we can’t run a press conference properly. Still don’t know what 1/2 the questions were.
Was Willie Walsh on the H.S.B.C. 350 list ?
FG steamrolling ahead with their plan to strip Ireland bare of anything of any worth and hand it over to the new Overlord Corporations, banks and business buddies.
Except that EI was sold off in 2006 by Fianna Fáil.
Snap! Well said Jason!
I see a lot of ‘promises’ above, nothing concrete.
FG would sell their own mothers on the back of a flutter on the horses.
What happens in 7 years if IAG decide:
“economic circumstances have changes and we now need those slots to connect directly with the USA” ??
Is that Ireland snookered? all so FG could march on with an ideological driven privatisation agenda?
Again, WHO are the ‘expert group’ that decided that it is a good idea?? Lets have the names so we can be assure that all is above board.
What would the government do if they didn’t sell and EI decided to do all that anyway? What did the government do when EI cut jobs and routes this past 6 or 7 years?
IAG have no right over the LHR slots, if they cut back on EI’s slots to and from LHR the slots go up for tender again by LHR and cant be given to British Airways as its against competition rules as they already have 50% of the LHR slots, Aer Lingus doesn’t own the slots, just merely rents them from LHR.
What are you on about, Jason? *EI* don’t decide anything. Their shareholders veto decisions. And the shareholders decide who runs and manages the company. It’s a privately owned company. Jez, RyanAir have more sway on the AL board than the government! I’m all for debate, but at least place your opinion on how companies are actually run. As I’ve said above, this whole debate is driven by emotive side issues of politics, what AL is now (rather than what it used to be 9 years ago).
The development of Aer Lingus (from the state run basket case it used to be) when traveling London to at one stage cost 200+ Euro is what should matter, not historionics of what our forefathers saw AL as a symbol of the state. The sale of AL to IAG actually allows it escape the beligerence and dogma that has enveloped it over the past decade.
This deal will allow Ireland become a major player in European Aviation, preclearance to US will be fully utilised. BA will re-route feeder flights from regional UK airports to Ireland to avoid congestion and higher charges at Heathrow. Clearing US immigration in Ireland is a major attraction.
Unions and workers never like change and will always object to any perceived threat to old style state run pay and conditions.
Only last week minister Howlin was giving us a ‘gift’ of 1.3 billion in tax breaks and taking more people off the USC. Following week they sell OUR stake in Aerlingus for the same amount. Using the money to buy votes!
They wouldnt even think to putting the money to better use like resorting essntial services that FG/LAB cut over the last few years.
You know the government aren’t getting 1.4 billion?
@jason. Yep, from what i undersrand under the terms of the Troika agreement regarding sales of state assets the Government are likely to only recieve one eight of the 1.3 billion.
Simon Covney seems to think other wise, that in fact the 25% share is not considered a state asset. But then, FG/LAB have lied their way through this term in government so whatever they say can’t be believed
The deal values EI at 1,3 billion. The government stake is 25% of that.
Lot of what if’s and maybe’s…
The great bargain basement Sale of Ireland’s Citizens Assets continues by FG & their poodles – Labour/SIPTU !
What would we expect after Siteserv & Irish Water ?
But The General Election is coming Guys !
What use is 25.1% to the Government?
Aer Lingus has about €500 million cash, so IAG are really buying it for €900 million
is it enda kenny and his political cowboys that own the share our tax payers and why dont they have referendums for this, and as they say 25% of something is better than 0% of fck all play school economics.
There is also another issue. Whilst the EI short haul fleet is relatively young, the long haul fleet is approaching the winter of it’s life. EI are going to come knocking from their shareholders to fund a regeneration of the current A330 fleet. Can the Government bankroll such a request? IAG certainly can.
I fear that in order for Aer Lingus to live on, this sale to IAG is the best option.
Aer Lingus have 9 A350s on order to replace their 8 A330s
http://corporate.aerlingus.com/companyprofile/fleet/
That deal was made 2 years ago, has nothing to do with IAG taking over
1.2 billion ,did aer lingus not sell for 335 million to iag ,,,more fine gael based lies from the journal ,headline should read
“failed x school teacher sells airline at a snip of its market value to get free travel
No its selling for 1.4 billion, the Government only get 335 million as they only have 25% shares in it, there’s still another 75% of shares to be dished out after the 335 million
Sums up the stupidity of this comments section. Look at what price the shares were trading at before the IAG offer and look a what the government sold for. Hoe anyone can make this out to be below market value is beyond me
This whole issue is a perfect example of what’s wrong with this website. People with no clue about anything just using whatever is to hand to have a go at the government.
You said it, Alan. Clueless. If the Journal reported on two flies crawling up a wall, someone would crash in with their obsession on Irish Water, Enda, and whether one of those flies was sponsorted by Clare Daly, Micheal Martin or Denis O’Brien.
Enda kenny is not a failed school teacher..he is a lazy man who like others likes to claim and milk from the state..easy job..just get advisers to do the work
why doesn’t the Irish government now buy Ryanair shares to keep the tin hat brigade happy that ‘we own airline shares’?
it seems irrationally important to some people, so let’s keep them happy. we’re selling at a premium and would be buying RyanAir at market.
There are REASONS for the so called ‘tin hat brigade’.
Siteserv ??? yeah that all looks above board, I eagerly await the ‘unbiased, impartial’ KPMG report, scoff.
I sit here in the knowledge that the 350 Irish people with the secret HSBC Swiss Bank accounts REMAIN protected.
Is Enda or Joan on that list? I can only presume they are!
You expect the left to respect a company that makes a profit without trade union interference? Ha! Good luck
Unions were fighting it?yeah in public,but behind closed doors another story.its time these union executives were removed as they are not representing the workers,they are laughing at them,and getting paid for it.at the moment union executives jobs is the biggest con of our country .
Like our oil gas water trees & anything else that’s not nailed down .. Is sold … Ireland the place were nothing is Irish owned .. Corporate criminal government .. Bye bye aer lingus
I dont think we should sell. We as a country cant seem to hold onto anything.
Why not let Ryanair buy a majority of Aer Lingus keeping the Irish ownership alive.
IAG may make promises now but i foresee AL no longer exisiting after a while…
Because as bad as service on BA had gotten in recent years it’s still miles better than Ryanair. Some of us need a way into and off the island.
Catastrophic mistake by the government. A pittance will be returned to the exchequer, the equivalent of two months social welfare bill.
We are gaining practically nothing but losing another piece of the family silver.
CIE, An Post and the National grid are all next for FG/Lab.
New routes. New jobs. New aircraft. More tourists.
What a catastrophe.
70 European airlines have gone bust in the last decade. EI was very nearly one of them. It won’t be now.
Give Claire Daly a shout. She could probably do with the canvassers.
more tourists my anal why would anyone want to visit this place they would have to remortgage there house with cost .Dublin airport 7.50 tea and sandwich car rental one of highest in the world cost of petrol ha ha ha the list is endless the Americans dont call it ripoff Ireland for nothing
Pac the public accounts committee get a majority of their information from davys ,are davys connected with kpmg and siteserv and topaz wnd denis obribe ,
I read that the unemployment figures were under 10% last week ( lies ) and that the figures were drawn up by davys
That makes pac just as useful as a politicans promise
I predict that the first thing Walshe will do when he gets full control of arelingus will be to outsource , baggage handling, aircraft cleaning/catering
sell Dublin next.
This is quite simple
There is an election in 2016 and it has to be bought
now the big question why dos IAG want it so much that they are going to allow a government make such crazy demands ???
State involvement in airlines is passé. It’s about time that the Government’s share in Aer Lingus is sold.
Ryanair can keep their options open to perhaps swop their shares in Aer Lingus for the more lucrative shareholding in IAG, seems to make sense.
You complainers realize that in 7 years… There will be another runway maybe 2 at Heathrow and Pier D will be built at Terminal 5….. And no more constrained slots.
why sell an asset? to pay banking debt. Jesus were f_______d
As i said for FIFA Karma will do its job, Enda Kenny is an ignorant man and no one it seems can question him. Aer Lingus should stay in Ireland there is no reason now that (Kenny has sold his soul to the devil) will they continue with the staff they have or will they be as friendly or have the slots they have at Heathrow but dear Willie is trying to convince the Irish people nothing will change, Why sell then.
No one says that it was Willie Walsh that was head over Aer Lingus and he turned it around and when he did that these ones here got rid of him and then he went to the U.K. and did the same thing there, what is wrong with him then???
If he can work miracles then why not have him or do certain politicians not like him, the same ones that got him removed??? Anyway we took loans from the IMF and when you do that then the IMF tells you to privatise everything, that is what they do, look at Greece?
have your say