Heathrow slots fraying Coalition nerves

The odds appear to be swinging against a sale of the State’s stake

The fear is IAG will take Aer Lingus slots  and hand them to one of its other subsidiaries. Photograph: Reuters

The fear is IAG will take Aer Lingus slots and hand them to one of its other subsidiaries. Photograph: Reuters

 

International Consolidated Airlines Group (IAG) could be forgiven for thinking that Irish people have something of an obsession with Heathrow Airport. Concerns over the fate of the Aer Lingus- owned landing slots at the crowded London hub could yet derail its efforts to buy the flag carrier, which it has been stalking for almost seven weeks.

The fears run something like this: IAG will take Aer Lingus slots earmarked for services from Ireland and hand them to one of its other subsidiaries, more than likely British Airways (BA), which will use them for more lucrative long-haul services.

Even Northern Ireland secretary of state Theresa Villiers has united with politicians and local lobby groups from the Republic in urging that the links with Heathrow be maintained should a deal go through.

Fears over the loss of the slots are behind much of the vocal opposition to a take over of Aer Lingus by IAG.

That opposition is fraying the nerves of Government politicians, particularly those in Labour. As a result, the odds appear to be swinging against a sale of the State’s 25.1 per cent stake. IAG will make any offer conditional on getting that holding, so if it does not there will not be a deal.

There are a lot of strands to this debate that have yet to be explored.

The current issue of airline industry newsletter Anna Aero highlights one: that regulators may not allow BA to simply take over Aer Lingus slots in any case as it could cut competition on the busy routes between Ireland and Britain.

That might seem like a direct interference in a company’s operational decisions, so some other commentators are dismissive of it, but given that competition watchdogs in Brussels are going to run the rule over any deal, it is at least worth teasing out.

The problem with teasing out this, or anything else, is that emotions are already running high. Combine that with political nervousness and you have an atmosphere where the chances of a rational debate, let alone a rational decision, are slim indeed.

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