BA and Aer Lingus latest

International Airlines Group (IAG), the owner of British Airways, last week committed to serving London to Ireland routes for five years in a bid to win backing from the Irish Government for its takeover of partly state-owned airline Aer Lingus.

The Aer Lingus board late January recommended an improved €1.36bn offer from IAL subject to the agreement of its two largest shareholders, budget airline Ryanair and the Irish state.

Under pressure from the Aer Lingus trade unions and opponents in parliament, resistance is building within the Dublin government to parting with its 25% holding, with worries that a takeover could reduce connectivity between Ireland and London.

The IAG offer appears to fall short of demands made by Irish Prime Minister Enda Kenny, who said that the suitor must provide some sort of "cast-iron permanent guarantee" on flights to Ireland for the government to even consider a bid.

IAG said that its proposals would offer a commitment from Aer Lingus that the government was not in a position to secure itself.

"In seeking the support of the Irish government, we propose to offer it legally binding commitments that go well beyond the protections currently available to it," said Willie Walsh, Chief Executive of IAG.

The IAG statement did not address government concerns about possible job losses at Aer Lingus.    www.aerlingus.com   www.iairgroup.com

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