Cantillon: Runway issue diverts IAG to Dublin

Dublin Airport provides IAG with scope to grow that Heathrow Airport no longer offers

Part of the rationale for the International Consolidated Airlines' Group (IAG) €1.4 billion bid for Aer Lingus is that the group believes Heathrow Airport is unlikely to ever get a third runway, or at least not in the foreseeable future.

Dublin, with its easy access to the north Atlantic and its customs pre-clearance arrangement with the US authorities, provides it with scope to grow that Heathrow no longer offers. So it plans on using Aer Lingus’s already established position in the market to do this.

However, a British government-appointed commission has, after thinking long and hard, decided that a third runway at Heathrow would best serve London’s future air transport needs. The decision was not entirely unexpected, although some believed that it was going to favour Gatwick in some way.

The Davies Commission – as it is known – believes the Heathrow option would bring all sorts of benefits in its wake: 70,000 news jobs, 250,000 extra flights and a £150 billion boost to the British economy over 60 years.

Nonetheless, the proposal faces a raft of political and planning hurdles. The commission itself attached all sorts of conditions to its recommendation, including a ban on night flights and tough controls on noise and air pollution. Meanwhile, some newspapers reported that the development would mean demolishing most of a nearby village.

IAG's views don't appear to have changed. Chief executive Willie Walsh (left) complimented commission chairman Sir Howard Davies on his diligence, but said the "real test is whether any political will exists to turn his recommendations into reality".

The group lobbied for a third runway in the past, but has not taken any particular position this time around, indicating that the group does not really believe it is going to happen.

Thus, it looks like the rationale for looking instead to Dublin remains, at least for now.