IAG to meet review group for further Aer Lingus talks

IAG and the review group set up by the Government to examine its bid for Aer Lingus are due to meet again today, as talks continue on the possible deal. Government sources say that Minister for Transport Paschal Donohoe is still seeking clarification from IAG on aspects of the deal, with the issue of the guarantee on the Irish airline’s Heathrow slots remaining central.

IAG is now thought likely to meet a lot of the other demands set out by the Government in its initial reaction to the offer.

The UK airline group is expected to formalise its replies following the lengthy discussions with the review group, made up of senior civil servants and legal and investment banking advisers.

It will outline where it expects new jobs to be created, how redundancies will be handled and will also commit to a registered employment agreement for Aer Lingus employees, giving some protection for their terms and conditions.

IAG will also meet Government commitments that it should outline its plans for new routes from Dublin, including those to North America, as well as firming up commitments in relation to Shannon and Cork. Sources believe that a deal has become more likely, with a positive report on the Financial Times website yesterday enough to send the share price up by 9 cent to close at 2.39.

Guarantee

However, a deal has not yet been reached on the length of time for which IAG would guarantee the use of the Heathrow slots. IAG has indicated it may move beyond its initial five- year guarantee, but is unlikely to meet the Government demand for a 10-year guarantee, at least unless some conditions are attached.

The mechanism through which the guarantee would be exercised also remains in question, as under EU law some parties in addition to the Government need to be involved in this.