The sale of Aer Lingus to British Airways owner IAG, which a week ago seemed to be no more than an exercise in formal rubber-stamping from the Irish government, has been stalled.
The government, which owns 25.1 percent of the airline, is now concerned about connectivity and the future of prime landing and take-off slots at London Heathrow Airport.
The Heathrow slots are seen as vital to maintaining the Republic’s links to key markets for tourism, investment and exports as they offer connections to a large number of international destinations not served directly from Irish airports.
IAG boss Willie Walsh, the Irish-born former boss of both Aer Lingus and British Airways, moved on Monday to pave the way to persuade the government to support the €1.4 billion takeover bid.
Walsh promised not to sell Aer Lingus’ 23 slots at Heathrow if IAG succeeds in taking over the Irish airline.
IAG, formed through a merger of BA and Spanish airline Iberia in 2011, said it would commit to operate the Heathrow slots on Irish routes for five years -- a stronger commitment than already existed.
The Aer Lingus slots would not be sold or transferred to another brand within the IAG group, such as British Airways or Iberia. The Aer Lingus brand and Irish headquarters would be maintained following acquisition.
Transport Minister Pascal Donohoe said he noted the statement from IAG on Monday afternoon and he would examine the details very carefully.
Walsh’s IAG document was forwarded to the government in response to a number of issues that arose since he made the €1.4 billion offer. The issues included a claim by the Labor Party, the minority partner in the government, to have blocked the proposed Aer Lingus sell-off.
Several Labor TDs (members of Parliament) and senators opposed the sale because they felt IAG failed to appease concerns about jobs, and the crucial Heathrow slots which are worth nearly €1 billion.
In addition Taoiseach (Prime Minister) Enda Kenny said he wants a “permanent cast-iron guarantee” that Irish airports will remain connected to Heathrow as part of IAG’s bid for Aer Lingus. Kenny said he wanted to know what the position would be after Walsh left IAG as chief executive.
Kenny, looking ahead to talks later this week, said, “If IAG are going to come to table in the next few days then I need to see, in so far as this is possible, a cast-iron permanent guarantee in respect of connectivity both for Cork, for Dublin, for Shannon, to a lesser extent Knock where we have flights not directly from Heathrow.
“I need to see flesh on that. If that happens government will of course continue to look at all the options here.”