Ryanair to bid for the 5 slot pairs at Gatwick that IAG has to give up, to take over Aer Lingus
The European Commission (EC) has approved International Airlines Group’s (IAG) acquisition of Aer Lingus, for €1.3 billion (£916 million, subject to British Airways surrendering 5 slot pairs at Gatwick. The EC said it required “significant concessions” on routes from London to Dublin and Belfast for the tie-up to go ahead and they wanted to be sure there would be enough future competition on the Irish routes, and also Dublin-Chicago. Ryanair has now said it will bid for the slots. Out of the 5 slots, 2 must be used for Dublin and one for Belfast and the other 2 can be used for either Dublin or Belfast. The Commission also insisted that Aer Lingus must continue to accept rival airlines’ connecting passengers at Amsterdam, Dublin, Gatwick, Heathrow, Manchester and Shannon. The agreement by IAG is another step towards its take-over of Aer Lingus, as Ryanair has said it will sell its 30% share in Aer Lingus to IAG (and the Irish government will sell its 25% stake). Ryanair will get €400 for its share, and is considering how to spend it – probably on paying down planes (it ordered 200 planes last year), though a bit might go to shareholders.
EC approves IAG bid for Aer Lingus
15 July 2015 (CILT)
The European Commission (EC) has approved International Airlines Group’s (IAG) acquisition of Aer Lingus, subject to the carriers surrendering five slot pairs at London Gatwick Airport.
Detailing its conclusions on Tuesday, the Commission said it required “significant concessions” on routes from London to Dublin and Belfast for the tie-up to go ahead.
“The Commission had concerns that the merged entity would have faced insufficient competition on several routes,” the EC said, identifying Dublin-London, Belfast-London and Dublin-Chicago as the main competition pinch points for the deal.
To appease the regulator, IAG offered to give up five daily Gatwick slot pairs to its rivals. Two of these five daily slots must be used to serve Dublin, while a third is reserved for Belfast flights. The remaining two pairs can be used for either Dublin or Belfast.
The Commission also insisted that Aer Lingus must continue to accept rival airlines’ connecting passengers at Amsterdam, Dublin, Gatwick, Heathrow, Manchester and Shannon.
“These commitments adequately address all competition concerns identified by the Commission. The Commission therefore concluded that the proposed transaction would not significantly impede effective competition in the European Economic Area (EEA) or a substantial part of it,” the Commission concluded.
IAG issued a brief statement, confirming the remedies and welcoming the ruling. This marks another major milestone for the takeover, following Ryanair’s recent confirmation that it is willing to sell its Aer Lingus shares to IAG.
Ryanair to bid for IAG slots at London’s Gatwick
By Julia Fioretti
Ryanair will bid for the slots IAG has agreed to release at London’s Gatwick airport as a condition of its takeover of Aer Lingus , Ryanair Chief Executive Michael O’Leary said on Wednesday.
IAG, which owns British Airways, gained EU approval for its €1.3-billion (£916 million) bid for Ireland’s Aer Lingus on Tuesday after agreeing to improve concessions to ease competition concerns, including giving up five slots at the London airport.
“We welcome the proposals by IAG that they would surrender some slots in Gatwick. We will certainly be bidding for the slots and we would certainly want to expand services we offer at Gatwick,” O’Leary told a news conference in Brussels.
Irish budget airline Ryanair said it would accept IAG’s offer for its 30% stake in Aer Lingus last week. The takeover had been conditional on the backing of Ryanair and the Irish government, which agreed to sell its 25 percent stake in May.
O’Leary said Ryanair did not expect to receive the 400 million euros of proceeds for its stake until September, and he said the board would then consider how to spend it.
“Speaking personally I’ll be advocating that we use the proceeds to help us pay down aircraft, but there’s clearly some interest among our shareholders that they will get some of the proceeds as well,” O’Leary said.
“The board I’m sure will be generous and do whatever is in the best interest of Ryanair’s shareholders.”
Ryanair last year placed an order for up to 200 new Boeing planes and is targeting 50 percent growth in passenger numbers by 2019.
International Airlines Group’s €1.4bn takeover of Aer Lingus cleared its final hurdle as the European Commission gave its approval of the purchase.
Margrethe Vestager, the EU competition commissioner, said on Tuesday: “By obtaining significant concessions from the airlines, the commission has ensured that air passengers will continue to have a choice of airlines at competitive prices after IAG’s takeover of Aer Lingus. The 5m passengers travelling each year from Dublin and Belfast to London will be able to choose among several strong carriers.”
As part of his pitch to win the backing of the Irish government and of the Irish public for the deal, Mr Walsh has promised to increase Aer Lingus’s transatlantic traffic through Dublin airport, which has some spare runway capacity.
Full FT story here Link