Aer Lingus says yes to the higher IAG Bid: What are the stumbling blocks?

There’s been a lot of press over Aer Lingus considering a takeover by International Airlines Group – owner of British Airways and Iberia – with the most recent bid valuing the airline at €1.3 billion – and the airline accepting it today (27th January 2015).

Aer Lingus Airbus A330 at Chicago O’Hare – Image, Economy Class and Beyond.

So Aer Lingus has finally said yes finally to IAG’s overtures… what  hoops to jump exist?

In the political sphere, Aer Lingus is still the national carrier of Ireland – and is 25.11% owned by the Irish State. This in itself is hot potato, as the the state will want to see as many direct links as possible maintained from Dublin and Shannon to London Heathrow.

Then there is the other major owner of Aer Lingus – Ryanair, who own 29.82% in the airline who will begrudge selling to a competitor – and would be seeking to maximise its value in the shares if it has to sell the airline.

The other 45.07% will need to be convinced by the cash on the table – including the small holding that Etihad has in Aer Lingus.

And there’s the small matter of the European Commission who will have the final say if the takeover can go ahead or not – and what remedies need to be made if the takeover is to go ahead – suffice to say, the London Heathrow – Dublin route would become an IAG monopoly.

So why is IAG going after Aer Lingus – well there is one big prize – The 23 take off and landing pairs at Heathrow Airport. Yes, it’s still the hunt for slots at Heathrow, even as IAG swallowed BMI.

Additional, Dublin is rising as a Trans-Atlantic hub due to the US Pre-Clearance facilities. With Aer Lingus, Delta, American Airlines and United taking advantage of this facility, for IAG this could be a good way to funnel flights.

As for the identity of Aer Lingus, I’d expect it to remain intact as a “national brand” (akin to Iberia and Vueling retaining their identities – BMI’s identity was “confusing” at best, and not that well recognised

There’s a long way to go with this – if the Aer Lingus board chooses to go ahead and if approvals are reached at all levels.

However, if they do get the takeover privilege – I’ll be amazed if IAG get to keep all 23 slot pairs at London Heathrow…

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