IAG and Aer Lingus saga must end soon

The saga of IAG’s proposed takeover of Aer Lingus just seems to go on and on. Reports that the Cabinet would discuss it the week after Easter proved incorrect and now, a month later, there is no substantive comment from any of the main players.

This will have to come to a head soon. There is no way that IAG will hang around for months on end interacting with the committee set up by Minister for Transport Pascal Donohue to advise the Government on what to do with its 25 per cent stake. It is hard to see this running past another couple of weeks without either a formal bid being launched, or IAG announcing that it is walking away.

However if the Government is going to sign up, then it will want to be sure that the other shareholders do, too. No point in taking the flak for selling if the whole deal falls through because Ryanair decides not to accept the offer for its 29.8 per cent stake. No doubt IAG are also sounding out the territory with Michael O’Leary. While Ryanair continues to object to UK competition rulings that it must reduce its stake in Aer Lingus to no more than 5 per cent, the offer from IAG must nonetheless have its attractions. With IAG bending over backwards to meet Government concerns, we wonder what Ryanair’s view is of the bid terms and whether it, too, may push IAG on some points.

We may never find out, though if the Government decides to accept the IAG bid we will discover on what terms it has done so. The indications have been that a deal is close on the length of the guarantee that will be given on the Heathrow slots and the format they will take. The question is whether the Government will jump the final hurdle. It would be easier for it to do so if the Aer Lingus trade unions were persuaded the deal was in their members’ interests, or at least something they did not need to oppose.

Sooner rather than later, however, the talking has to stop and the Government has to call it. The length of time it has all gone on suggests it is giving serious consideration to doing so, but, as of now, the deal is still not over the political line.