International Consolidated Airlines Group has offered the Irish government further guarantees over the future of services at flag-carrier Aer Lingus as it seeks to acquire the airline.
IAG’s previous announcements about its proposal to make an offer for Aer Lingus Group have repeatedly highlighted the importance of direct air services and connectivity for investment and tourism in Ireland.
IAG believes its proposal would secure and strengthen Aer Lingus’ long term future and brand as a member of a successful and profitable European airline group, offering significant benefits to both Aer Lingus and its customers.
The group – which operates Iberia, British Airways and Veuling - has submitted a proposal to make an offer for Aer Lingus.
The proposal consists of an offer of €2.55 per share, structured as a cash payment of €2.50 per share, payable upon completion, in addition to an ordinary dividend of €0.05 per share.
To secure the support of the Irish government, IAG has proposed to offer legally binding commitments that go well beyond the protections currently available to the government and would give it an important role in securing the future of Aer Lingus.
At a meeting of the Irish Joint Committee on Transport and Communications (Oireachtas) in Dublin Willie Walsh, IAG chief executive, said that he believed that there would be a compelling commercial case to continue Aer Lingus flights between Cork and Shannon to London Heathrow.
However, as a sign of IAG’s confidence in the routes, IAG has offered to enhance the protections already offered to the Irish government by offering a specific commitment relating to the operation of slots to serve the London Heathrow – Shannon and London Heathrow – Cork routes.
This commitment has been offered following engagement with the Irish government and in response to concerns raised by, in particular, the minister of tourism, transport and sport.
The commitment would apply for five years.
In total, the proposed commitments would ensure that, unless there is explicit Irish government agreement Aer Lingus’ slots at London Heathrow cannot be sold, including to other IAG airlines.
IAG has also confirmed Aer Lingus’ name, head office location or place of incorporation in the Republic of Ireland, cannot be changed.
At the same time, Aer Lingus’ Heathrow Slots would be operated on Irish routes for at least five years and, within that general commitment, three daily slots would be operated on London Heathrow – Shannon and four daily slots would be operated on London Heathrow – Cork.
The board of Aer Lingus has indicated to IAG that the financial terms of the proposal are at a level at which it would be willing to recommend to Aer Lingus shareholders, subject to being satisfied with the manner in which IAG proposes to address the interests of relevant parties.