Aer Lingus Heathrow slots could be worth €1.2bn

Aer Lingus’s access to London’s Heathrow Airport could be worth €1.2 billion on the basis of a sale of landing rights by another airline.

That would make the value of the Heathrow access alone close to the €1.36 billion International Consolidated Airlines’ Group (IAG) is offering for the Irish carrier.

The latest value, based on a $60 million deal done by Scandinavian airline SAS, will put further pressure on the Government not to part with the State's 25.1 per cent stake in Aer Lingus at the €2.55 a-share IAG is proposing to offer for the company.

SAS is selling one "slot-pair", as landing and take off rights are known, at Heathrow for $60 million to an anonymous buyer believed to be either Qatar Airways or a US airline.

Spokeswoman Malin Selander said the buyer had approached SAS. “This was an offer we could not refuse.”

The transaction values Aer Lingus’s 23 slot-pairs at $1.38 billion or €1.2 billion. In addition, the airline has almost €400 million in net cash and a fleet of aircraft worth €700 million. This puts a value of €2.3 billion on its main assets.

‘Well north of €1 billion’

Industry analyst

David Holohan

, of Merrion Stockbrokers, agreed the SAS deal implied a value “well north of €1 billion” for the Heathrow rights but said “the real value lies in the ownership of those slots. Without them, Aer Lingus’s profitability would significantly diminish”.

He argued that they were worth more to the airline for the traffic and cash that they generated than as assets to be traded.

Government officials negotiating with IAG would “almost certainly” take notice of the latest price paid for Heathrow slots, which were central to the talks, sources said.

The slots are seen as critical to maintaining the Republic’s links with markets for tourism and investment. The 25.1 per cent stake allows the State to block their sale.

Political opponents of a deal say that, once that control is lost, IAG will use the rights to service lucrative long-haul business and leave Ireland without access to important markets.

IAG is promising to give the Government and business groups a legally binding veto over their sale and pledges they will be used only for Irish routes for five years.