Aer Lingus, a small but potent pawn in Atlantic-European airline contests

The likelihood that Irish carrier Aer Lingus will accept a takeover bid from IAG,  the company that owns British Airways and Spanish flag carrier Iberia is the stuff of battles left, right and centre and the “fun” is expected to begin from all quarters later this week.

The key interest outside of Ireland, the UK and the EU, with its embattled legacy carriers struggling to fend off rich Arab carriers as well as the wicked depradations of unruly but successful low cost carriers, is what it might mean for access to London’s crowded and dysfunctional yet vital Heathrow Airport,

International Airline Group, IAG, headquartered in London and registered in Madrid, already benefits from its control of Heathrow slots for British Airways and Iberia, and being able to use the Aer Lingus slots as its sees fit would give it a bigger marketing club to use against US giant Delta and its ‘annoying’ 49 percent ownership of Virgin Atlantic, which also helps those carriers protect their trans Atlantic interests from the British Airways/American Airlines alliance.

But that’s not the only disruption the deal might bring to a much disrupted European and trans Atlantic airline scene.

This report in The Guardian is a good primer for curious non-European onlookers to get a handle on the labour, competition and sectional interests at stake.

Keep in mind that Ryanair, which failed in various attempts to take over Aer Lingus, is said to be an enthusiastic seller of its captive 29.82 percent stake in the Irish carrier. But to who? Maybe Etihad, which has 4.1 percent of it, and is on the record as saying it opposed the latest IAG bid when it was first mooted last month.  Maybe not. But with Ryanair and Etihad, as well as the Irish Government (with 25 percent of Aer Lingus), in the picture, no end of mischief with a view to a big paycheck is totally out of the question,  even though the mechanics of such alternative deals are not as simple as they first look.

Just imagine the hysterics in some parts of European and UK politics and airline managements if Etihad, with its substantial interests in airBerlin and Alitalia, were to decide to set a higher price for their investment, or another 45 percent of the airline, even though this reporter heard James Hogan, its CEO, say back in December that the Abu Dhabi carrier had no interest (at that moment) in buying more of the Irish carrier.

IAG also owns Spanish low cost carrier Vueling, which like BA and IB, trades as an independently branded airline.

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