LONDON (Reuters) - British Airways’s owner committed to serving London to Ireland routes for five years on Monday in a bid to win backing from the Irish government for its takeover of partly state-owned airline Aer Lingus AERL.I.
Aer Lingus’s board last month recommended an improved 1.36-billion-euro (1 billion pounds) offer from International Airlines Group (ICAG.L) subject to the agreement of its two largest shareholders, budget airline Ryanair (RYA.I) and the Irish state.
Under pressure from Aer Lingus’s trade unions and opponents in parliament, resistance is building within the government in Dublin to parting with its 25 percent holding, with worries that a takeover could reduce connectivity between Ireland and London.
IAG said in a statement it would offer legally binding commitments to continue using the slots operated by Aer Lingus between London’s capacity constrained-Heathrow Airport and Ireland for five years.
The offer appeared to fall short of demands made by Irish Prime Minister Enda Kenny, who said on Sunday that the suitor must provide some sort of “cast-iron permanent guarantee” on flights to Ireland for the government to even consider a bid.
IAG said its proposals would offer a commitment from Aer Lingus that the government was not in a position to secure itself.
“In seeking the support of the Irish government, we propose to offer it legally binding commitments that go wellbeyond the protections currently available to it,” IAG’s chief executive Willie Walsh said.
A takeover would give IAG more take-off and landing slots at Heathrow, BA’s home base and a major European hub for international flights.
IAG’s commitments, would be subject to Irish takeover rules and EU competition reviews, the British-based company added.
The IAG statement did not address government concerns about possible job losses at Aer Lingus.
Reporting by Sarah Young; editing by John Stonestreet