IAG share price in focus as group enhances commitments to Dublin

on Feb 13, 2015
Updated: Oct 21, 2019

British Airways and Iberia owner International Consolidated Airlines Group (LON:IAG) has offered additional safeguards to the Irish government on Aer Lingus (LON:AERL) connectivity in a move to win Dublin’s backing for its €2.55-per-share bid for the Irish carrier. The blue-chip company’s chief executive Willie Walsh, who yesterday argued the takeover case before Irish MPs, warned that Aer Lingus would struggle to survive on its own.

IAG’s share price gained ground in yesterday’s trading, closing 1.63 percent higher at 561.50p. Shares in Aer Lingus jumped 3.12 percent to close at €2.25.
IAG said in a statement yesterdaythat to secure the support of the Irish government, which holds 25.1 percent in Aer Lingus, it had proposed to enhance the protections already offered to Dublin by making a specific commitment relating to the operation of slots to serve the London Heathrow – Shannon and London Heathrow – Cork routes. Last week, the FTSE 100 company made several commitments to the Irish government, including ensuring that the Irish carrier’s 23 landing slots at Heathrow could not be sold, as well as maintaining the slots on Irish routes for five years.

IAG’s chief executive, Dubliner Willie Walsh, who began his career as an Aer Lingus pilot, however, said that he was not prepared to extend the five-year timeframe.
The five-year Heathrow guarantee was final, he told Irish MPs yesterday, as quoted by Reuters. The newswire also quoted Walsh as telling the Newstalk radio station ahead of the committee hearing that Aer Lingus needed to be part of a bigger group.
“I spent 25 years working there, I love the company but I have been very clear for a long time, Aer Lingus has a tough job ahead of them trying to survive – survive, never mind grow – in an industry that is becoming more consolidated,” Walsh said.
As of 07:03 GMT, Friday, 13 February, International Consolidated Airlines Grp share price is 561.50p.

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