IAG offer lands as Aer Lingus board is effectively down to 11 members from 13

David Begg would have had to act in interests of the company as a whole rather than representing one group

David Begg, whose second term ended last week just as the third proposal from IAG was materialising

David Begg, whose second term ended last week just as the third proposal from IAG was materialising

 

While all eyes are on the Aer Lingus board’s next move, it’s interesting to note that it is not actually at full strength. In fact, it is effectively down to 11 members from its full complement of 13.

Outgoing chief executive, Christoph Mueller voluntarily absented himself, as his share options will vest in the event of a sale and so he stands to gain directly from a deal.

The second director not to be taking part is David Begg (pictured) , whose second term ended last week, just as the third proposal from IAG was materialising.

Begg is general secretary of the Irish Congress of Trade Unions and while he was appointed as an independent director in 2011 he would have a clear understanding of the fears now being voiced by unions such as Impact about the possible consequences for staff of a takeover by IAG.

At least some of the unions involved are suggesting up to 1,000 jobs could go if a deal is done, and draw a comparison with IAG’s takeover of Spanish airline Iberia where 4,000 jobs were lost.

There is an argument that there is no comparison between that and Aer Lingus, partly because the Irish airline has already restructured. Nevertheless, unions are a key constituency in all this and they are going to make sure that they make their views known.

While he might have an insight into their thinking, Begg would have had to act in the interests of the company as a whole, rather than representing one group or another. Interestingly, he was originally nominated to the board in 2008 by one group that could also have a say, the employee share option trust.

The beneficiaries of that, former and current staff, are included with a sizeable number of retail shareholders in the airline, and it is thought many would be happy to sell at €2.50, as they originally got their shares on very attractive terms.

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