Sale of Aer Lingus
MEDIA STATEMENT, ISSUED BY THE PRESIDENTS OF:
Ennis Chamber: Paddy Darmody
Galway Chamber: Frank Greene
Limerick Chamber: Cathal Treacy
Shannon Chamber: Kevin Thompstone
Recent Government concerns articulated by jobs Minister Richard Bruton that Ireland will ‘pay a heavy economic social cost in years to come if regional imbalances are not addressed’ will ring hollow should slots at London Heathrow (LHR), currently controlled by Aer Lingus, be lost in any planned sale of the national carrier.
Connectivity, through Heathrow, gives a small open economy like Ireland unrivalled daily air connectivity to the biggest airport in our country’s leading trading partner and global access and connectivity from Irish airports through the full range of carriers operating at Heathrow.
With Heathrow currently at full capacity, the benefits to IAG of acquiring 23 additional slot pairs are clearly obvious – a more dominant position at Heathrow than their 53% slot share currently offers; the opportunity to redeploy newly acquired slots to more lucrative long-haul routes, some perhaps via Dublin, but with a more likely adverse effect on Shannon and Cork.
The loss to Ireland and particularly the regions served by Shannon and Cork, stretching effectively from Waterford right up to Mayo, is also abundantly clear: it would remove direct air access to the most extensive and effective network of connections to global markets for investors, customers, visitors, and decision makers.
The financial gain for the government of circa €320m, in the context of a €67bn bailout, does not warrant the potential detrimental impact the loss of connectivity will have.
While the international aviation trend is toward consolidation, European competition policy concerns centre on the emergence of a monopolistic competition model with a small number of large players dominating the aviation sector. This acquisition would further enhance this and raise questions as to how ‘fit for purpose current competition law is.
Consumer interest is not best served by the emergence of dominant players and, if the bid is successful, it would result in IAG having a monopoly on Ireland-Heathrow routes.
Ireland needs strong cities and strong regions to attain its aspirations of becoming a globally competitive knowledge economy. We must make it easy for business to do business in these cities and regions, and increase tourist footfall. International connectivity for rapid movement of people, goods and services and air access is a key factor in decision making on investments.
The State has a duty to act strategically in the interests of its citizens’, employers’ and investors’ long-term requirements, and carefully take into account the wider impact of the takeover of any sale of Aer Lingus on our economy and connectivity. The loss of connectivity to London Heathrow would have almost immediate and dire consequences for business across the country.
The retention of the 23 slot pairs at London Heathrow connecting all Irish airports – Dublin, Shannon, Cork and Belfast – must form part of the guarantees that attach to any sale of Aer Lingus, whoever the ultimate successful bidder.
ENDS
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