IAG Makes A Bid To Purchase Aer Lingus

IAG, the International Consolidated Airlines Group the parent of British Airways, Iberia and Vueling, has made an offer to purchase Aer Lingus, which board has rejected the offer as too low.

Aer Lingus IAG Takeover

Ireland based Ryan Air owns 29.8% and the Irish government 25.1% stake of the airline. Many of the media outlets suggest that IAG would be mainly after Aer Lingus’ Heathrow slots.

You can read more about this development on Reuters website here.

Here’s an excerpt from the Reuters piece:

Buying Aer Lingus would give British Airways more take off and landing slots at London’s Heathrow Airport, a key hub for profitable long-haul routes but which is operating at close to capacity, preventing the airline from adding more flights.

IAG chief executive Willie Walsh knows Aer Lingus well. He started his career as a pilot there and was the former national carrier’s chief executive between 2001 and 2005.

But any acquisition of Aer Lingus would need the backing of budget Irish carrier Ryanair, which owns a 29.9 percent stake in Aer Lingus after three failed takeover attempts, and the Irish government which owns 25 percent of the carrier.

Conclusion

British Airways already controls more than 50% of the Heathrow slows and gaining control of Aer Lingus would increase this by 3%. Wouldn’t this purchase further decrease the competition of the transatlantic air travel and lead to more dominant position of the British Airways at the Heathrow airport?

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